5 American Stocks That Will Benefit from China’s Economic Slowdown

1. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 80

Tesla, Inc. (NASDAQ:TSLA)’s leading competitors in the EV sector are Chinese automakers NIO Inc. (NYSE:NIO), Li Auto Inc. (NASDAQ:LI), and XPeng Inc. (NYSE:XPEV). With a slowing Chinese economy, these competitors are less likely to cut into Tesla, Inc. (NASDAQ:TSLA)’s market share, which makes it one of the primary beneficiaries of the economic situation in China. 

Morgan Stanley analyst Adam Jonas, in a note titled “Do Investors Appreciate the Tesla China Risks?”, argued that House Speaker Nancy Pelosi’s visit to Taiwan “casts the global battery race into a new light” and said that Tesla, Inc. (NASDAQ:TSLA) is “highly exposed to both the risk and the opportunity” from global EV battery dominance. Tesla, Inc. (NASDAQ:TSLA) has one of the highest exposures to the Chinese market, but its role in building-out U.S. and Western European renewable energy infrastructure is “under-appreciated”, observed the analyst, who reiterated an Overweight rating and an $1,150 price target on Tesla, Inc. (NASDAQ:TSLA) shares on August 3.

According to Insider Monkey’s Q1 data, 80 hedge funds were bullish on Tesla, Inc. (NASDAQ:TSLA) at the end of March 2022, compared to 91 funds in the prior quarter. Cathie Wood’s ARK Investment Management held a notable stake in the company, consisting of 1.6 million shares worth $1.7 billion. 

Here is what GMO LLC has to say about Tesla, Inc. (NASDAQ:TSLA) in its Q1 2022 investor letter:

“To put the demand growth for clean energy materials into perspective, let’s look at Tesla (NASDAQ:TSLA). At its Battery Day last year, Tesla projected three terawatt hours of lithium-ion battery capacity needed in 2030 for the EVs and storage they expect to produce. To reach this target, Tesla alone would gobble up approximately 75% of the world’s current nickel production and four times the world’s current lithium production. These numbers are astounding enough, but when one considers that EVs currently represent just 15% of global nickel demand and about 45% of lithium demand and that Tesla will likely be producing only a small proportion of the world’s EVs in 2030, the implications are staggering. Clean energy materials companies will make a lot more money in the decades to come than they ever have both because they will be selling a lot more metric tons of material and because there are certain to be shortages where supply can’t keep up with the rapidly growing demand.”

You can also take a look at 10 Best Stocks For Inflation According to Redditors and 10 Dividend Stocks of All Time. 

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