Elon Musk just warned about credit-card debt, commercial real estate, and foreign conflicts. Here's why the Tesla chief is so worried.

• Elon Musk reeled off a raft of challenges facing automakers and the wider US economy.
• The Tesla CEO warned about consumer debt, a credit crunch, and commercial real-estate woes.

Like a car mechanic inspecting a banger, Elon Musk ticked off a long list of concerns about the US economy during Tesla's third-quarter earnings call on Wednesday.

The EV maker's CEO noted that many American households are just scraping by, as higher prices and steeper interest rates on credit cards, mortgages, and car loans squeeze their monthly budgets.

"A large number of people are living paycheck to paycheck and with a lot of debt," Musk said, adding that credit-card costs have surged to "extremely punishing" levels. "If you cannot pay them off and you're still accruing interest at 20%, you're at best headed to a bad place."

Musk pointed out that it's become tougher to borrow money, as the collapse of Silicon Valley Bank and other regional banks this spring has sparked a pullback in lending.

"There are a number of people who simply cannot get credit, period," he said. "Even if they've got a job and everything is solid, the banks are a little gun-shy on handing out credit, given that a bunch of them kicked the bucket earlier this year."

The world's richest man cautioned there's likely to be more fallout as higher rates, tighter lending, and declining asset values hit vulnerable sectors of the economy.

"I think there's still quite a few shoes to drop on the bad credit situation," he said. "Commercial real estate obviously is in terrible shape."

Musk flagged the anxiety caused by the Russia-Ukraine and Israel-Hamas conflicts as a headwind too.

"People are reading about wars all over the world," he said. "Buying a new car tends to not be front of mind."

The auto executive also drilled down on how the economic situation is hurting his industry specifically. Consumers have less disposable income to spend on a car, and buying one is more expensive and arduous today than it was two years ago, thanks to higher rates and tighter lending. People also tend to hold off on buying a new car during periods of economic uncertainty, he said.

The car industry's cyclical nature was one reason why two of America's largest automakers went bust during the financial crisis. Musk said the failures were looming large at the moment.

"I am still somewhat scarred by 2009 when General Motors and Chrysler went bankrupt," he said. "That is seared into my mind with a branding iron because Tesla was just hanging on by a thread during that entire time."

As a result, Musk said he was wary of blindly charging ahead with his expansion plans.

"I don't want to be going at top speed into uncertainty," he said. "We want to just get a sense for the global economy before we go full tilt on the Mexico factory."

Most strikingly, Musk warned the current economic backdrop could worsen, causing headaches for Tesla regardless of its strength as a business.

"I'm not saying things will be bad, I'm just saying they might be," he said. "If the macroeconomic conditions are stormy, even the best ship is still going to have tough times."