Is Tesla still a buy? What this CIO says, and 3 alternatives he likes
Tesla is having a bad week. The company’s profit missed expectations and its stock price suffered its biggest drop in more than a year. The U.S. electric vehicle giant has been an investor darling, with its shares doubling in 2023, but the company itself has warned of a slowdown in 2024. Kingsley Jones, chief information officer and founder of boutique consulting firm Jevons Global, is not optimistic about the stock right now, due to increasing competition from Chinese electric vehicle manufacturers. “Unless Tesla can really expand their model range…and lower the price…I think they’re going to have some problems because China is going to really eat into their market opportunity,” he told CNBC Pro Talks on Thursday. Added that Tesla could face margin pressure in the U.S. if it doesn’t lower prices and costs. Prefer BYD over Tesla Jones prefers Tesla’s Chinese EV rival BYD, which he says is his of electric vehicles. Jones said the stock’s valuation is attractive given its growth rate. “This company is vertically integrated, they control most of the supply chain, including batteries. So we think they have a strong future going forward.” development,” he said. “I don’t see any indication that they don’t have sales momentum, business momentum, new model launch momentum, or even now export momentum,” Jones said. In early January, data from both companies showed that BYD overtook Tesla in the fourth quarter. Becoming the world’s largest electric vehicle manufacturer and surpassing Tesla’s production for the second consecutive year in 2023. After dominating China’s domestic market, BYD is now actively expanding overseas. Like Tesla, it doesn’t just sell cars and make its own batteries and other parts to stay competitive. Jones’ last words were: “I’m a Tesla owner, I don’t own the stock. I own BYD, the stock, not the car. So I think that kind of says it all.” Two other electric vehicle alternatives Another electric vehicle company Pin Jones likes is Volvo Trucks, a subsidiary of Swedish automaker Volvo. “The reason we like (electric) trucks is that Western manufacturers are still quite strong in this space,” he said. Volvo has a “very good” truck business, he said, adding: “In particular, they have made a good transition in electric trucks. So they are probably one of the leaders in electric trucks globally.” He said, He likes its “good portfolio” of sustainable biodiesel trucks as well as electric and fuel cell trucks. Finally, Jones called Chinese electric vehicle maker Nio “one of the leaders” in China’s fiercely competitive electric vehicle industry. He pointed out that the company’s domestic and overseas sales figures are good and “worthy of careful study.”
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