Elon Musk has turned Tesla into a meme stock, says top economist

Elon Musk doesn't deliver as much as he used to, but he's still over-promising, according to a prominent economist, who noted the tesla The CEO's recent insistence that his electric vehicle company should be valued like an artificial intelligence company.

in a Project Syndicate op-ed published Wednesday, UC Berkeley economics professor and former Treasury official J. Bradford DeLong He gave Musk credit for creating a historically significant technology company that is the “spearhead in the transition to internal combustion engine vehicles.”

Musk's rocket company SpaceX It also shows great promise and has proven to be an effective trainer for engineers working on battery technologies, electric vehicles and space science, DeLong added. “Without it, those technologies would not have advanced as much as they have.”

In fact, while Musk has frequently over-promised, he over-delivered on those fronts, helping Tesla's market capitalization and Musk's personal wealth soar since the 2010s, DeLong said.

But more recently, it has shifted its focus from electric vehicles, charger networks and batteries to social media, artificial intelligence and robotaxis.

Even as Musk promised last month to accelerate plans to launch a new lower-cost electric vehicle model which Wall Street sees as critical to its future, also reaffirmed its robotaxi ambitions to develop a fleet of self-driving cars.

Meanwhile, Tesla's surprising dismissal of its entire Supercharger team raised concerns about the key network as well as the future of the industry. This also comes amid slower demand for electric vehicles, weaker sales, broader workforce cutsa sharp drop in stocks and a exodus of senior leaders.

“However, while overpromising has continued, overdelivering has not,” DeLong wrote. “The fundraiser, cheerleader and coach of teams developing real technologies has become a meme carnival barker.”

He pointed to Tesla's earnings call last month, where Musk urged Wall Street analysts to value his company more as a robotics or artificial intelligence company rather than an automotive company. In particular, Tesla should look “almost exclusively in terms of solving autonomy” and being able to apply it to a gigantic fleet of cars, the CEO added.

But DeLong noted that more than 80% of Tesla's sales in the first quarter came from automotive revenue, adding that car manufacturing doesn't have anywhere near the marginal costs of an IT company, which can write code once and run it everywhere.

“For all current Tesla shareholders who plan to unload their holdings in the coming years, everything depends on the company succeeding as a meme stock, and Musk is working diligently to achieve that goal,” DeLong warned. “Given that there are virtually no long-term Tesla shareholders, the market doesn't particularly care that the company lacks a CEO who is trying to turn it into a durable for-profit organization.”

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