5 American Stocks with High Exposure to China

4. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 72

Tesla, Inc. (NASDAQ:TSLA)’s Elon Musk has said that of the 3 million vehicles the company has produced, one-third of them have been built in China. Tesla, Inc. (NASDAQ:TSLA)’s Shanghai factory was opened in 2018, and there was a lot of production backlog due to COVID-19 restrictions and supply shortages. China is one of the main markets for Tesla vehicles and Musk has said that it would eventually become the biggest end-market for the company. 

On August 25, Berenberg analyst Adrian Yanoshik lowered the price target on Tesla, Inc. (NASDAQ:TSLA) to $290 from $850 and maintained a Hold rating on the shares. The analyst adjusted the target to factor in the 3:1 stock split. He expects Tesla, Inc. (NASDAQ:TSLA)’s gross margin to benefit as its production mix moves away from Fremont, California, “which suffers from high labor costs, an inefficient layout and relatively dated equipment”. However, after demo drives, the analyst sees restricted near-term potential from autonomous driving. 

According to Insider Monkey’s data, 72 hedge funds were bullish on Tesla, Inc. (NASDAQ:TSLA) at the end of Q2 2022, compared to 80 funds in the prior quarter. ARK Investment Management is a notable stakeholder of the company, with 1.4 million shares worth over $1 billion. 

Here is what Grantham Mayo Van Otterloo & Co. LLC had 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.”