1. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Funds Holders: 85
Tesla, Inc. (NASDAQ:TSLA) is an EV company known for its innovations in the automotive and clean energy industries. It designs, manufactures, and sells BEVs and offers energy storage and solar products. Tesla is a key player in the EV market and has influenced the adoption of the North American Charging Standard (NACS), which has been in use since 2012 and gained broader industry acceptance in 2022. It tops our list of best EV stocks to buy.
In Q3, the company’s global vehicle sales rose by 6.4% in the third quarter, marking its first increase this year and suggesting a possible recovery in demand for electric cars as interest rates decline. The company delivered 462,890 vehicles in the third quarter and produced nearly 470,000. Tesla’s (NASDAQ:TSLA) Model 3 and Y were the best-selling products and it delivered nearly 440,000 of those.
At the “We, Robot” event on October 10, the company’s CEO Elon Musk introduced two new vehicles, the Cybercab and Robovan. The Cybercab, designed without a steering wheel or pedals, is expected to cost under $30,000 and begin production in 2026. The Robovan will be capable of transporting up to 20 passengers or cargo. Musk compared the event to the significance of the 2017 Model 3 launch.
In an October 15 newsletter by Cathie Wood’s Ark Disrupt, said that while Tesla’s (NASDAQ:TSLA) stock price declined after the event, the firm still views it in a good light. The firm said that the company plans to introduce unsupervised Full Self-Driving (FSD) in California and Texas next year, with a full robotaxi network expected by 2025 or 2026. The company also intends to sell the Cybercab to consumers and may encourage third-party robotaxi fleet businesses, although most fleets will likely be owned by external operators.
Elon Musk mentioned robotaxi ride costs could range from $0.30-$0.40 per mile, which aligns with research predicting costs around $0.25 per mile. This would be far cheaper than current ride-hailing services and will position robotaxis as a highly competitive option.
The firm said that Tesla’s (NASDAQ:TSLA) stock dropped after the event, likely due to delayed FSD timelines now expected between 2025 and 2026. However, the company’s data advantage may enable it to scale faster than competitors.
Baron Partners Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q2 2024 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) manufactures electric vehicles, related software and components, and solar and energy storage products. The stock contributed as Tesla continued to drive vehicle manufacturing costs lower, accelerate the launch of new models, and invest heavily in its lucrative AI initiatives. Shareholders reaffirmed the CEO’s compensation plan, alleviating personnel and legal uncertainties. Despite material operational complexities resulting in significant shutdowns of key manufacturing facilities and lower sales volume, Tesla presented better-than-expected margins in the quarter. It expects to launch a lower cost model as soon as late 2024, which should result in accelerated revenue growth, reduced manufacturing costs, and increased factory utilization. The company continued to advance its autonomous driving capabilities, expanding its already significant data centers and developing its humanoid robot Optimus. These investments increased confidence in the attractive growth opportunities that remain ahead.”
While we acknowledge the potential of Tesla, Inc. (NASDAQ:TSLA) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TSLA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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