Business News

Elon Musk uses seventh-grader language on earnings calls, according to algorithm

Key Points
  • Autos CEO's have had their language on earnings calls analyzed by a computer.
  • Tesla's Elon Musk and Ford's James Hackett are found to speak like seventh-graders.
  • GM's Mary Barra found more likely to use sophisticated language and employ industry speak.
Elon Musk, chief executive officer of Tesla Motors
David Paul Morris | Bloomberg | Getty Images

The language employed by Tesla's Elon Musk when speaking on earnings calls is at the level of a 12-year-old, according to a report from CB Insights.

Stretching back to 2011, the research firm has carried out an algorithmic analysis of text harvested from 28 quarters' worth of earnings calls from Tesla, Ford, General Motors (GM) and Daimler. As well as focusing on Musk, the study examined language employed by CEOs James Hackett, Mary Barra and Dieter Zetsche.

They analysis concluded that Tesla's Musk and Ford's Hackett spoke with language expected of a seventh-grader while Daimler's Dieter Zetsche was compared to that of a ninth-grade student. GM's Mary Barra came out top, talking to investors and analysts with language expected of a 10th grader.

A separate algorithm examined the use of jargon, where CEOs employed business phrases or terms that those outside the industry might find hard to understand.

Employing the least esoteric phrasing was Daimler's Zetsche, who addresses his the audience in his second language. Musk and Hackett were also found to be low on the use of jargon, while GM's Barra employed the most.

Mary Barra, CEO, General Motors
Mary Catherine Wellons | CNBC

Musk, however, scored highest on the "Vagueness Algorithm," while Barra was found to use the clearest, most direct, form of language.

When comparing the firms on a topic basis, CB Insights claimed that Tesla no longer "owns the conversation" about electric vehicles (EVs).

The analysis suggested GM was found to talk about the development of EVs far more than the other three, but Ford and Daimler's focus on the topic is also rising sharply.

The study also claimed that in-car "connectivity" was fading from the conversation while the future of autonomous driving, types of mobility and electric vehicles were continuing to dominate investor calls.