The former president of electric vehicle giant Tesla said Thursday he would not bet against the company, noting that it’s emerging as a “formidable competitor” to automakers around the world after the company beat third-quarter earnings expectations.
Currently not a Tesla investor, Jon McNeill told CNBC’s “Squawk Box” the stock is “priced to perfection” right now, but he said he still drives Teslas. McNeill, also a former Lyft COO, highlighted strong gross margins at the company.
Despite supply chain issues, Tesla saw sales rise to record breaking numbers at the company, even as other automakers struggle to keep up with their own demand.
“We’re up more than 70% year-over-year versus GM and Ford, which are seeing declines of around 30% year-over-year,” McNeill said, listing the multiple reasons he would not bet against Tesla. “They’re sitting now on $16 billion cash.”
Drivers who order vehicles from Tesla often have to wait months before receiving the product, speaking to the demand for the electric vehicles but also raising production concerns among investors.
With a new factory in Shanghai and two more expected to open in Texas and Berlin, the company has “proven they can open more than one factory now and produce at volume,” McNeill said, noting that Tesla’s Shanghai factory is producing so much that they’re exporting back to North America. “So I think the thing to keep an eye on here is their ability to increase production capacity to meet demand,” he added.
Other automakers introducing hybrid or electric vehicles of their own just “opens more eyes to EVs,” according to McNeill. “Tesla’s got a dominant share in the U.S., they’re at 65% market share in the U.S., 21% worldwide, but I think that’s in the context of Tesla only having 1% market share in the global car market and EVs only have 4%.”
McNeill, currently CEO of DVx Ventures, predicts the EV industry is at the beginning of what will be a “multi-decade growth story” for electric vehicles around the world.
Shares of Tesla — up more than 20% in 2021 and up 100% over the past 12 months — slipped nearly 1.5% in Thursday’s premarket.