Tesla Inc TSLA mega-bull Cathie Wood in an interview with Barron's said on Wednesday legacy automakers don't have the genes to make it big in the electric vehicle universe and that the Elon Musk-led company could easily grab up to 25% automotive market share in five years.
What Happened: Wood, who runs the popular money managing firm Ark Invest, said General Motors Co GM and Ford Motor Co F are setting aside billions to switchover from traditional gas-powered engines to electric vehicles but it may be too little and too late for them.
Wood said GM and Ford stocks have appreciated this year as investors recognise their attempt to make the switch to electric but EV manufacturing is not something the legacy players are used to doing as they “were born in the industrial, gas-powered age.”
“And the reason is they don’t have the DNA for this brave new world,” Wood told Barron's.
Wood said Tesla could take the biggest share of the electric vehicle market and grab 20% to 25% share of the total automotive market in five years, provided the Musk-led company is successful with autonomous driving in the United States.
Why It Matters: Ark Invest counts Tesla as its largest holding and owns shares worth billions in the company via its exchange traded funds. She has also estimated the average electric-vehicle prices to come down significantly in the coming years.
“Our latest thinking is that by the year 2026, the average electric vehicle will cost about $15,000.”
While Wood has favoured Tesla, the money manager has not disclosed any investment in the recently-listed electric vehicle maker Rivian Automotive Inc RIVN, a company backed by Amazon.com Inc AMZN and Ford.
Despite not delivering a single vehicle to customers, Rivian has quickly grabbed a valuation of about $125 billion — much higher than GM and Ford’s — after it went public earlier this month.
Price Action: GM shares, which have risen 59.5% YTD, closed 3.2% higher at $64.61 a share on Wednesday.
Ford shares, which have risen 134.3% so far this year, closed 0.86% higher at $19.96 a share. Tesla shares closed 3.25% higher at $1,089 a share on Wednesday and have risen 49.23% YTD.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.