EXCLUSIVE: Tesla Lowers Prices In China Because It Can, Not Because It Has To, Says Cathie Wood

Investor attention has been focused on Tesla Inc TSLA after the Elon Musk-led company slashed its prices in China several times over the course of a few months due to losing market share to other competitors.

This was a topic Ark Invest founder Cathie Wood weighed in on during her exclusive interview with Benzinga CEO Jason Raznick on “The Raz Report.”

"Well, we know that Tesla cuts prices because it can," Wood said, explaining the company's strategic position in China, seemingly nixing any concern the automaker will see meaningful reductions in its revenues.

“For every cumulative doubling in the number of units produced, costs decline 28%.”

Wood commented on Musk's competition in the Chinese electric vehicle market, particularly from manufacturers such as Warren Buffett-backed BYD Company ADR BYDDY, which beat Tesla on prices: “Tesla seems to be the preferred vehicle along with BYD [as] many of its vehicles are less expensive.”

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Tesla’s Chinese strategy forms a critical aspect of its global vision, Wood noted, as the company transitions to lithium iron phosphate chemistries in the Xi Jinping-led country, further reducing costs.

Wood’s insights offered a nuanced understanding of the automaker’s market positioning and cost structure in a competitive landscape. Tesla's innovative strategy aligns with Ark’s broader investment thesis, as indicated by its significant holdings in Tesla across multiple Ark ETFs.

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Illustration made with photo courtesy of Ark Invest.