Wood’s comments came after Tesla’s share prices slumped nearly 43 per cent this year through April 22, as electric vehicle sales slowed globally. A rebound in the last two months has erased most of the losses, though it’s still underperformed former Magnificent Seven technology peers by wide margins. Autonomous taxi networks will be a “winner-takes-most” opportunity, where the provider that can get passengers from point A to point B in the safest and quickest fashion will clinch the lion’s share of business, Wood said.
The network provider will be able to take a 30 per cent to 50 per cent share of revenue generated by fleet owners on its platform, giving it “a recurring revenue with explosive cash flows” as well as a profit margin north of 50 per cent, she added. That departs from the build and sell, or “one and done” business model of making vehicles. “That is what we think people are missing: the size of the opportunity, how quickly it’s going to scale, and how profitable it’s going to be,” she said, adding she expects Tesla to lead the US market.
Tesla’s weighting in the US$6.5 billion ARK Innovation ETF Fund surpassed 15 per cent last week. Ark does not usually add to a position once its weight in the portfolio hits 10 per cent, Wood said.
While a holding may drift higher from share appreciation, the firm would usually start selling well before it hits Tesla’s levels. The asset manager has taken some profits on Tesla but has permitted it to.
