Cathie Wood, CEO of Ark Invest. Paras Griffin/Getty Images
Cathie Wood, CEO of Ark Invest, has long been bullish on Elon Musk and Tesla. She also expects Detroit automakers to follow the path Musk took with electric vehicles.
“We expected many traditional automakers to recognize the signs of the times and move into the electric vehicle market as quickly as possible,” she told Bloomberg Surveillance this week.
Instead, they have scaled back their electric vehicle plans as they wary of electric vehicle growth, which, while still strong, has slowed recently. Wood, who had her best month ever in November after a shaky stretch, believes her decisions are good for Tesla in the long run.
General Motors had planned to build 400,000 electric vehicles over about two years until mid-2024. But in October, the company abandoned that goal, citing CFO Paul Jacobson as a slowdown in the electric vehicle market. Production of electric pickup trucks Chevrolet Silverado and GMC Sierra in suburban Detroit would be delayed by a year, the company said.
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This month, Ford said it was lowering production targets for its signature F-150 Lightning pickup truck from 3,200 to 1,600 per week due to slowing demand. And in November the company resumed work on an electric vehicle battery plant, although with scaled back ambitions, saying it would produce around 40% fewer batteries than planned.
Although EV growth has slowed in recent months, it is still robust. According to JD Power, around 869,000 all-electric vehicles were sold in the US in the first 10 months of 2023 – a 56% increase from the same period last year, but a slowdown from two years earlier.
“The narrative has taken hold that electric vehicles are not growing,” Ford Chief Financial Officer John Lawler said in October. “They grow. . . It’s just growing slower than the industry, and to be honest, that’s what we expected.”
Ford posted a third-quarter loss of $1.3 billion at its EV division and forecast a full-year loss of $4.5 billion.
But such losses are necessary and to be expected, says Wood:
“Both GM and Ford have said, 'We're resigning.' “We won’t do this until it’s profitable.” The problem is that they have to scale to be profitable. That's how it works. These are learning curves that they write down, and they manifest themselves in cost reductions.”
However, she believes her hesitation will only benefit Tesla even more.
“The fact that they are pulling out,” she said, “means there is more share for Tesla and others who choose to do so.”
Read more: After Elon Musk predicts leading automakers will be Chinese, smartphone giant Xiaomi unveils its first electric vehicle and promises to be among the “top 5 in the world.”