Cathie Wood, CEO of the infamous American tech investment firm ARK, has told City A.M. she is still bullish on Tesla and Elon Musk despite the company’s poor performance and strategy changes in recent months.
Tesla shares have slumped 43 per cent since the start of 2024, but Wood is still all in and has been adding to ARK’s holdings. The group bought $18m in Tesla stock just yesterday, and ARK has bought more than $100m in shares this month.
While Tesla has been traditionally included in the ‘Magnificent 7’, along with Apple, Microsoft, Alphabet, Amazon, Nvidia, and Meta, some have now begun to refer to the group as the ‘Mag 6’ due to the stock’s performance since the beginning of the year.
However, Wood said she was glad Tesla had fallen out of trend, leaving her to buy more shares as other investors have pulled away from its volatility.
“We don’t think it is a high risk stock, we think the riskier stocks are the traditional auto stocks,” she told City A.M.
“Some of them are pulling back from EVs [electric vehicles] because they’re not profitable, but they won’t be profitable for them unless they scale.”
Tesla’s stock price has also suffered due to Musk’s increasingly fondness for the far-right, with the billionaire coming under fire for showing support for antisemitism on social media.
When asked about Musk’s increasingly erratic and racist posts on X (formerly Twitter), Wood replied: “We don’t listen to what he says. We watch what he does in terms of pushing technologies.”
On technology, she was adamant that “nobody even comes close” to Tesla, though begrudgingly noted the new Hyundai IONIQ 5 N looked like it was doing “pretty well”.
Nevertheless, “Tesla is really leading the charge,” Wood said, with Musk “moving the space forward so quickly.”
Despite many other automotive brands building their reputation on safety, “Tesla doesn’t advertise” theirs, she said, even though she views them as safer.
“The average car on the road has an accident every 200 thousand miles, a Tesla with FSD [full self driving], not even the new version, has an accident every 3.2m miles”, Wood said, citing internal ARK research.
“The reason for accidents and fatalities on the road is human error,” said Wood, describing Teslas as the “the safest cars on the road.”
However, Tesla has recently had to recall over 2m cars sold in the US due to issues with its autopilot software system causing crashes.
Another key benefit of Tesla is their “infrastructure in the US is proliferating is pretty quickly,” said Wood, referring to the rapid spread of Tesla chargers throughout the country.
Wood recently expanded ARK’s offering to Europe, launching two US funds and a new Robotics ETF built specifically for the European market.
“As technologies are converging, AI and robotics are tightly linked together,” said Wood.
“So we think it’s a great strategy, especially if tomorrow, Elon Musk, during the Tesla earnings report that everybody is wondering about, comes out and says we’re just about there for robo-taxis, and that will be a $25,000 vehicle.”
Tesla’s earnings report is scheduled for this evening.
