Cathie Wood Has Good News for Tesla, Rivian, Lucid and EVs

March 12, 2022

Ark Investing’s Cathie Wood has seen her fortunes rise and fall during a very turbulent period for the stock market. She likely received too much credit when her various exchange-traded funds were flying high and has taken too much blame now that they’re not doing quite as well.

That’s sort of how it goes for any high-profile stock picker, and it’s not all that different from how Warren Buffett, Carl Icahn, George Soros, or really anyone who has gotten famous for being right more often than not when it comes to picking stocks.

Wood, however, rose very quickly and became a sort of white-hot star (and people love to see quick falls after quick rises). That has made her a tad controversial, but her new take on old should win her some favor with Tesla (TSLA) – Get Tesla Inc Report, Lucid Motors (LCID) – Get Lucid Group, Inc. Report, Rivian (RIVN) – Get Rivian Automotive, Inc. Class A Report, and any other electric-vehicle-company fans.

What she says should also give gasoline-car companies like Ford (F) – Get Ford Motor Company Report and General Motors (GM) – Get General Motors Company Report both cause for concern and more justification for their efforts to pivot to EVs.

What Does This Mean for Tesla, Lucid, and Rivian?

We may be at a tipping point when it comes to the demand for electric vehicles. Generally, high gas prices have been good for fuel-efficient cars, and lower gas prices have made people more willing to buy gas guzzlers like SUVs and pickup trucks.

Now, instead of buying a small car that uses less gas, more people might be willing to spend the money on an electric vehicle. The problem might be that Tesla, Rivian, and Lucid, not to mention all the other companies in the EV space, don’t have any electric vehicles to sell them.

Rivian and Lucid produce essentially no vehicles right now and will ramp up over years to hit meaningful numbers. Tesla has a roughly one million vehicle run rate and might be able to double that.

Elon Musk clearly understands the opportunity as he commented on production during Tesla’s fourth-quarter earnings call.

“The fundamental focus of Tesla this year is scaling output. So both last year and this year, if we were to introduce new vehicles, our total vehicle output would decrease. This is a very important point that I think people do not — a lot of people do not understand,” he said.

Basically, Musk plans to put all his might to increase how many cars Tesla makes because he sees the same opportunity Wood does.

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