Cathie Wood Uses Tesla Q3 Deliveries As Example To Chide Traditional Automakers For Hiding Behind 'Chip Shortage'

Popular money manager Cathie Wood on Sunday chided legacy automaker General Motors Co GM for blaming semiconductor shortages for its slumping U.S. sales even as Tesla Inc TSLA registers record third-quarter sales numbers.

What Happened: Wood, who has a bullish stance on the Tesla stock, wrote in a Twitter post that electric vehicles end up using three to five times more chips per car than traditional gas-powered cars and yet the Elon Musk-led company has delivered a solid quarter than the legacy automotive player.

Today, $TSLA announced that in the third quarter it sold 241,300 vehicles globally, up 73% year over year (YoY) and 20% quarter over quarter (QOQ). Meanwhile, $GM blamed the ~33% YoY decline in its US sales on chip shortages. What? #EVs require 3-5x more chips per car produced!

— Cathie Wood (@CathieDWood) October 2, 2021

The Detroit, Michigan-based General Motors on Friday said it sold about 447,000 vehicles from July through September, down 32.8% from a year earlier.

The Palo Alto-based Tesla delivered 241,300 vehicles in the third quarter, a jump of 73% year-over-year and smashing past expectations of 220,900 deliveries. Tesla sales were also up 20% on a quarter-on-quarter basis.

Wood believes there is an overall weakness in gas-powered auto demand and there’s a likelihood that chip supplies could “loosen up” considerably, perhaps turning the problem from a shortage into a glut.

“Because consumers bought new and used cars to avoid mass transit during the past year, the V-shaped recovery in autos was more dramatic than that after most of the more prolonged recessions during the past 50 years,” Wood said.

Wood had last month said she believes the average electric vehicle price will drop below that of the average gas power vehicle price in the next year or so. 

By the time autos recover strongly, if @skorusARK’s analysis is correct, the sticker prices of #ElectricVehicles will be at or below those of like-for-like gas powered vehicles, suggesting that traditional auto companies will have to transform from ~95% gas to majority electric.

— Cathie Wood (@CathieDWood) October 2, 2021

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Wood has predicted Tesla will hit the $3,000 mark by the end of 2025.

Why It Matters: A global semiconductor shortage — that started last year after demand suddenly picked up above expectations following the first batch of intense pandemic-induced lockdowns — has continued to roil global supply chains.

Legacy automakers such as GM and Ford Motor Co F have been forced to make their most profitable models first. Electric automakers such as Nio Inc NIO and Tesla have also noted the difficulty in securing enough chips. The industry expects the shortage to last into next year.

The chip shortage has caused GM and Ford to shut down production for weeks.

Price Action: Tesla shares closed marginally lower at $774.74 on Friday.

See Also: Ford Announces Major Push Toward Electric Vehicles With $11B Investment And Construction Of 4 Factories: Here's What You Need To Know