Cathie Wood says she’s optimistic about Tesla than ever, sees inventories quintupling in 5 years

Cathie Wood says she’s optimistic about Tesla than ever, sees inventories quintupling in 5 years

Ark Invest’s Cathie Wood said her conviction in Tesla remains strong as she continued to buy the electric vehicle company’s decline. “It could come from EVs alone … it’s almost a fivefold increase of this stock over the next five years,” Wood said during an investor webinar on Thursday. “And if you believe in autonomy at all, it’s more like 13 times over the next five years. So we’re more optimistic about Tesla than we’ve ever been.” Wood previously predicted that the shift to electric vehicles will be dramatic, leading to 60 million electric vehicle sales in five years. The innovation investor has long been a Tesla bull and sees shares reaching split-adjusted levels above $1,500 by 2026. Shares of Tesla are up about 3% this year to end Thursday’s session at $127.17. TSLA 1Y Mountain Tesla Elon Musk’s company has been getting a lot of bad news lately. Tesla’s December sales of Chinese-made cars fell to their lowest level in five months amid the country’s Covid outbreak. Musk’s rocky $44 billion Twitter acquisition may also have contributed to the decline, as he sold tens of billions of dollars in his Tesla stock last year to fund the acquisition. “Tesla declined in the fourth quarter and had a dramatic re-rating as the capitulation of growth strategies was highlighted,” Wood said. “The disappointments in China were well telegraphed.” Tesla fell 53% in the fourth quarter, bringing its losses to 65% in 2022. The well-regarded fund manager has been buying the struggling automaker during the sell-off for several months. Wood announced Thursday that she took some profits from Exact Sciences and put a majority of those profits into Tesla. Tesla made big price cuts on its vehicles, first in China and then, on January 13, in the US and Europe. Wood said the aggressive price cuts would help the company stay competitive. “Tesla will be very aggressive on pricing,” Wood said. “Tesla can afford it. It has the lowest cost structure and, in our opinion, is the most aggressively innovative. The other automakers will compete. They have to follow those price drops, but it will hurt them from a margin quite significant from a profitability standpoint.”