While Tesla is still pursuing an all-electric future, Detroit’s veteran automakers are putting the brakes on their electric vehicle plans. ARK Invest Founder, CEO, and CIO Cathie Wood, one of Tesla stock’s biggest bulls, sees this as a blessing in disguise for companies like Tesla, which are all-in on electric cars today.
During an interview with Bloomberg Surveillance, Wood noted that she and her team were expecting traditional automakers to rush into the electric vehicle sector so that they could scale their EV business. Instead of doing this, however, veterans like Ford and General Motors have opted to scale back on their EV goals.
“We expected a lot of traditional auto manufacturers to see the writing on the wall and rush as quickly as they could into scaling big time into electric vehicles. And what has happened recently? Both GM and Ford have said, ‘We’re stepping back. We’re not going to do this until it’s profitable,'” Wood noted.
Wood’s comments about Ford and GM are quite accurate. General Motors was planning to produce 400,000 electric cars by mid-2024, but this target has been abandoned, as per CFO Paul Jacobson. The production of the electric Chevrolet Silverado and GMC Sierra will be delayed by a year as well, as noted in a Fortune report. Ford, meanwhile, has slashed its F-150 Lightning output from 3,200 to 1,600 per week over demand concerns.
While Ford and GM’s strategy of holding off on EVs for now may be understandable, Wood noted that such a move may only prove beneficial to the automakers’ biggest rivals. After all, there are companies like Tesla that are going all-in on the EV sector today.
“The problem with that is in order to be profitable, they (Ford and GM) need to scale. That’s how this works. These are learning curves that they are writing down, and those are expressed in cost declines. So the fact that they’re pulling back means they’re more there’s more share for Tesla and others who choose to go for it,” Wood said.
Interestingly enough, the EV sector is still growing pretty well in the United States. J.D. Power has noted that about 869,000 electric cars were sold in the US in the first ten months of the year. That’s a jump of about 56% year-over-year. This jump, however, was likely driven mostly by Tesla, whose mainstream vehicles like the Model Y crossover and Model 3 sedan dominate their respective segments.
Watch Cathie Wood’s segment with Bloomberg Surveillance in the video below.
Don’t hesitate to contact us with news tips. Just send a message to email@example.com to give us a heads up.