U.S. Markets close in 4 hrs 51 mins
  • S&P 500

    +108.80 (+2.96%)
  • Dow 30

    +768.95 (+2.61%)
  • Nasdaq

    +365.54 (+3.38%)
  • Russell 2000

    +59.09 (+3.46%)
  • Crude Oil

    +3.01 (+3.60%)
  • Gold

    +27.50 (+1.62%)
  • Silver

    +0.60 (+2.92%)

    +0.0141 (+1.4354%)
  • 10-Yr Bond

    -0.0690 (-1.89%)
  • Vix

    -1.08 (-3.59%)

    +0.0107 (+0.9415%)

    -0.2720 (-0.1881%)

    +676.12 (+3.48%)
  • CMC Crypto 200

    +10.05 (+2.26%)
  • FTSE 100

    +164.06 (+2.37%)
  • Nikkei 225

    +776.42 (+2.96%)

Elon Musk Just Said Tesla Sales Are Tanking In China, Sending Stock Down 6%

elon musk tesla quizzical
elon musk tesla quizzical

REUTERS/Lucy Nicholson Elon Musk.

Elon Musk took the stage Tuesday at the Detroit Auto Show, speaking at the Automotive News World Congress at the Renaissance Center in downtown Detroit.

He dropped a bomb right away when he said that Tesla sales were down in China for the fourth quarter of 2014.

That sent Tesla stock into a tailspin after-hours, down 6% to $192 per share.

The problem, according to Musk, is perception: Potential Chinese customers don't think China's charging network is sufficiently built-out to ensure that the cars can cover significant distances. He said that perception has been dealt with.

In fact, the Chinese charging network is slated to expand, but it's currently not nearly as extensive as what Tesla has in the US and Europe.

Updated Tesla Superchargers In China
Updated Tesla Superchargers In China

Tesla The current Tesla Supercharger network in China.

Musk talked about the past and the future — he noted that an investment by Daimler long before Tesla launched the Model S sedan enabled the company to survive. It was a bigger deal than a Department of Energy loan guarantee of $465 million that Tesla secured as the financial crisis threatened to send the startup into bankruptcy.

Daimler sold off its Tesla stake last year. Toyota also sold off a stake in the electric carmaker.

During his speech, Musk said that Tesla would be selling "millions" of cars by 2025 and that the company's goal is to become a volume automaker, not a niche luxury player.

Tesla's next car, the Model X SUV, is scheduled to arrive in mid-to-late 2015. Musk has spoken often about how Tesla has been trying to manage demand for the vehicle, but he said in Detroit that the company has already sold the production run of the X for the entire year.

Tesla Model X Detroit 2014
Tesla Model X Detroit 2014

Bill Pugliano/Getty Images The Tesla Model X at the Detroit Auto Show.

Answering questions from an interviewer, Musk said that Tesla has "gross margins" in the high-20% territory. However, it can be tricky to assess Tesla sales from the outside, as the company doesn't report them on a monthly basis like other major automakers do. We generally have to wait for Tesla's quarterly earnings calls to get insight into just how many cars Tesla is selling — or not selling — in the US and global markets.

Musk remains all in on electric cars, even as big carmakers such as Toyota have shifted their focus to hydrogen fuel cells. He said that major automakers should continue to invest in electric vehicles, a challenging proposition these days given EVs' relatively weak market position, the disappearance of many EV startups that were once Tesla rivals, and the oil-price collapse that has sent gas to $2-a-gallon levels in parts of the US.

For what it's worth, Musk also talked about his other company, SpaceX, and discussed what running a space-exploration concern has taught him about how to improve an automaker. His mantra is "cheaper and lighter," and he believes that innovation at SpaceX may help make Tesla's market dreams a reality.

Musk is pretty clear on his ultimate goal for Tesla, which is to rescue the planet from the threat of global warming.

TSLA Chart 1/13/15
TSLA Chart 1/13/15

Yahoo Finance Tesla stock slides lower after hours, below $200 a share.

NOW WATCH: Here's What It's Really Like To Ride In A Self-Driving Car

More From Business Insider