China’s Real Estate Market Crash Can Affect These 5 American Stocks

2. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 80     

Tesla, Inc. (NASDAQ:TSLA) markets electric vehicles and clean energy solutions. The firm has manufacturing facilities in China and the country has been one of the main drivers of margins and sales for the company in the past few years. A real estate crash in China would effectively slow down the Chinese economy overall, resulting in problems related to EV sales in China for Tesla. Already, the firm has reported a close to 18% quarterly drop in China revenue due to slowing EV demand. 

On August 8, Canaccord analyst George Gianarikas maintained a Buy rating on Tesla, Inc. (NASDAQ:TSLA) stock and increased the price target to $881 from $815, backing the firm to battle price headwinds with EV momentum and competitive lead from manufacturing. 

At the end of the first quarter of 2022, 80 hedge funds in the database of Insider Monkey held stakes worth $11 billion in Tesla, Inc. (NASDAQ:TSLA), compared to 91 in the previous quarter worth $12 billion.

Here is what Grantham Mayo Van Otterloo & Co. 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, Inc. (NASDAQ:TSLA). At its Battery Day last year, Tesla, Inc. (NASDAQ:TSLA) 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.”