Cathie Wood: BYD cars are 'fabulous,' but Tesla is still competitive
Rebecca Blackwell/AP via Getty Images
- Cathie Wood said Tesla's cars are "still very competitive, if not the most competitive."
- Wood said Tesla still wins in "metrics like range and power for a given price."
- Chinese automaker BYD's revenue outpaced Tesla's last year.
Ark Invest's Cathie Wood says she's confident in Tesla's ability to fend off rivals like BYD in the EV race.
"So we're looking at the BYD cars, and they are fabulous, from what we can see — fit, finish, design," Wood told Bloomberg in an interview on Tuesday at the HSBC Global Investment Summit in Hong Kong.
"If you look at metrics like range and power for a given price, Tesla is still very competitive, if not the most competitive, depending on the model of car," Wood added.
Chinese automaker BYD's performance has put a spanner in Tesla's plans to remain the world's biggest EV manufacturer. The company's revenue outpaced Tesla's in 2024, and it recently unveiled chargers that are four times more powerful than Tesla's and can charge an EV in 5 minutes.
But Wood told Bloomberg investors need to consider the additional value Tesla can get from its work in autonomous driving.
Tesla's robotaxis will "account for 90% of the value of the company in five years" because of the relatively higher margins that come from selling self-driving software instead of EVs, Wood added.
"So we think Tesla and BYD are both in the lead from an EV point of view alone. If you layer in robotaxi, of course, BYD is not seizing the moment there, at least not yet," Wood said.
In the interview, Wood said she still stood by Ark Invest's $2,600 price target for Tesla. Her investment management firm issued the price target in June.
"And that's not even including humanoid robots, which are now moving into the Tesla ecosystem much faster than even we expected. So more than a tenfold increase just from robotaxis," Wood said, referencing Tesla's Optimus robots.
Tesla's stock price has plunged by over 40% from its record highs in mid-December. The company's shares closed at about $278 on Monday, down from a peak closing price of $479 in December.
Tesla's CEO Elon Musk name-dropped Wood during an all-hands meeting on Thursday when he told employees autonomous vehicles would increase the company's value.
"It's so profound and there's no comparison with anything in the past. It just does not compute. But it will compute in the future. And some people, like Cathie Wood at Ark Invest, do see the future," Musk told employees on Thursday.
"So what I am saying is, 'Hang on to your stock,'" Musk added.
To be sure, Wood isn't the only investor who believes that Tesla can withstand competition from BYD.
Christopher Tsai, the president and chief investment officer of Tsai Capital, told Business Insider last week that the EV market's potential for growth means Tesla and BYD can coexist.
"We're talking about almost a hundred million vehicles a year, and there's room for more than one player," Tsai, who has millions in Tesla, said.
"History shows that people will pay for something that is superior, even if there is a competing option that is free," Tsai added.
Tesla and BYD did not respond to requests for comment from BI.