5 Best Autonomous Vehicle Stocks To Invest In

4. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 88

Tesla, Inc. (NASDAQ:TSLA) is an American automobile company headquartered in Austin, Texas. Tesla, Inc. (NASDAQ:TSLA) designs, develops, produces, and sells high-performance electric vehicles, energy-producing and storage systems, and provides services tied to its sustainable energy products. Tesla Autopilot is a set of advanced driver-assist systems with features such as lane centering, automated lane changes, traffic-aware cruise control, self-parking, and the ability to call the car from a garage or parking place.

On December 20, 2022, Vijay Rakesh, an analyst at Mizuho, reduced his price target on Tesla, Inc. (NASDAQ:TSLA) to $285 while keeping a Buy rating on the stock. According to the analyst, the electric vehicle market will continue to grow, although high prices and a challenging environment can become a hurdle.

As per Insider Monkey’s database, 88 hedge funds owned stakes in Tesla, Inc. (NASDAQ:TSLA) at the end of the third quarter. ARK Investment Management remained the leading stakeholder of the company at the end of Q3 2022.

In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Tesla, Inc. (NASDAQ:TSLA) was one of them. Here is what the fund said:

In 2014, before we began to invest in Tesla (NASDAQ:TSLA), I called Roger to ask whether he thought Elon Musk’s electric car business would succeed. I did not believe that Roger, an owner of dealerships that sell cars powered by internal combustion engines (ICE) would likely have a favorable opinion of Tesla’s prospects. That was principally for two reasons:

First, automobile manufacturing and distribution is unusually complicated, capital intensive, and highly regulated, which makes profitability problematic; second, cars with ICE motors require extensive annual maintenance, and dealer services revenues, not profits from automobile sales, are the most important contributor to profits of perpetual licensed ICE car dealerships.

Penske Automotive Group is principally an ICE car dealer. Since electric cars are powered by batteries and need little service, franchised dealerships are incented to sell ICE, not EV automobiles. Further, Roger had been a long-term director of General Motors. General Motors’ ICE automobile business would be disrupted if Tesla were successful. (click here to read more…)