Cathie Wood Warns Demand Destruction In Used Car Space Could Lead To Serious Issues In Auto Credit Markets


Crypto Whales Are Loading Up — Are You?

New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.


Ark Invest CEO and popular money manager Cathie Wood warned on Wednesday that the latest used car price data indicates demand destruction due to increased preference for electric vehicles could lead to serious issues in the auto credit markets. 

What Happened: Wholesale used vehicle prices increased 3.9% month-over-month in November while sales were down 2% year-on-year, as per the latest data from Manheim and Cox Automotive.

ENTER TO WIN $500 IN STOCK OR CRYPTO

Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!

Further, retail supply ended at 49 days in November, much above a normal of 44 days. Wholesale supply ended at 29 days in November, higher than the normal of 23 days.

The final week of November brought large fluctuations in supply metrics due to the Thanksgiving holiday, Manheim said in a report.

Overall, the data shows wholesale prices increased even as vehicle inventories, which are already at a record low, stayed longer at dealerships. 

Wood tweeted to warn that the demand destruction is likely to cause serious problems in the auto debt markets this time around.


FREE REPORT: How To Learn Options Trading Fast

In this special report, you will learn the four best strategies for trading options, how to stay safe as a complete beginner, ​a 411% trade case study, PLUS how to access two new potential winning options trades starting today.Claim Your Free Report Here.


“During 2008-09, auto credits held up better than any others. This time will be different,” Wood said.

See Also: Chip Shortage In Focus With US Automakers Like Tesla, Ford, GM But Cathie Wood Says Used-Car Data Points In Different Direction

The U.S. auto industry was severely hit during the great 2008 recession, with the "Big Three" U.S. car companies General Motors Co (NYSE:GM), Chrysler, and Ford Motor Co (NYSE:F) facing potential insolvency. 

Sales declined as Americans stopped buying big and more profitable vehicles as gas prices rose. Chrysler and GM were forced to file for Chapter 11 bankruptcy protection in 2009.

Why It Matters: The new vehicle industry is already battling low inventory and record high prices due to the global chip shortages, which in turn pushed up the demand and prices for the used vehicles as well. 

The latest data shows a steep rise in prices for used cars even as sales in November slipped year-on-year and remained flat over October.

See Also: Cathie Wood Maintains Inflation To Prove Temporary, Says 'Cracks' In Commodity Markets Evident

The Manheim report said new vehicle sales were down 17% year-on-year in November and down 4% month-over-month.


Crypto Whales Are Loading Up — Are You?

New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.


Posted In: NewsautoautomotiveCathie Woodelectric vehicles