“Just because a visionary might no longer be with the company doesn’t necessarily mean we would exit,” the investor Christopher Tsai said of Elon Musk’s importance to Tesla.Andrew Harnik via Getty Images
Christopher Tsai is the president and chief investment officer of Tsai Capital.
A fifth of the firm’s $137 million portfolio was in Tesla stock last month, and Tsai told BI he’s buying more.
Tsai said Musk’s ties to the Trump administration were a “significantly positive event” for Tesla.
For many investors, Tesla’s fortunes are inextricably tied to its CEO, Elon Musk.
But Tsai Capital’s Christopher Tsai says the EV giant could endure even if Musk were no longer at its helm.
“Elon is clearly a key piece of the story, but Steve Jobs was also a very key piece of the Apple story. Steve Jobs could do things that Tim Cook could not do, and Tim Cook does things that Steve Jobs couldn’t do,” Tsai told Business Insider.
“Just because a visionary might no longer be with the company doesn’t necessarily mean we would exit,” he added. “We would need to look at the fundamentals and the situation at the time.”
Tesla figures prominently in Tsai’s $137 million investment portfolio.
The 50-year-old is the president and chief investment officer of his namesake investment management firm. In an SEC filing on February 12, Tsai Capital said it owned 69,700 shares, or about one-fifth of its portfolio.
But Tsai Capital held even more Tesla shares as recently as August. In an SEC filing on August 13, Tsai Capital said it owned 131,300 shares of Tesla.
Tsai told BI he decided to scale down on his Tesla investments last year because it was becoming “an outsized portion” of his portfolio.
“We first invested in Tesla in February 2020, paying an average of $41.66 a share,” Tsai said. “Tesla has increased significantly since our initial investment.”
Tsai said Musk’s relationship with the Trump administration remained a “significantly positive event” for Tesla.Mandel Ngan/AFP via Getty Images
Tsai Capital, however, has started buying Tesla stock again, Tsai said. This is despite the turmoil and uncertainty plaguing the company in recent weeks.
Tesla shares have slid by more than 50% from their record highs. The company’s shares closed at about $225 on Tuesday, down from a peak closing price of $479 in mid-December.
In an interview with The Guardian published Saturday, Tsai said he hoped Musk’s DOGE run would be “short-lived” so Musk could focus on Tesla.
Tsai told BI that while Musk’s work with DOGE weighed on Tesla, Musk’s involvement with the US government was a “significantly positive event” for the car company.
“Elon being involved in the government is allowing him to shape policy,” Tsai said, adding that he thought the “negative market sentiment will disappear at some point.”
Tsai said Tesla would not be displaced by the Chinese automaker BYD within the EV industry.CFOTO/Future Publishing via Getty Images
Tesla has been facing increased competition from rivals like the Chinese automaker BYD.
Like Tesla, BYD is pursuing autonomous vehicles. Last month, BYD said it would give customers its self-driving software free. Tesla owners in China must pay about $8,800 to use the vehicles’ self-driving features.
On Tuesday, Hong Kong-listed shares of BYD went up by as much as 6% after the company announced a charging system that it said could provide a nearly 250-mile range on a five-minute charge.
Tsai told BI he didn’t think BYD would displace Tesla given the EV market’s potential for growth.
“We’re talking about almost a hundred million vehicles a year, and there’s room for more than one player,” Tsai continued, adding that Tesla would not be priced out by BYD.
“History shows that people will pay for something that is superior, even if there is a competing option that is free,” Tsai said.
Musk and Tesla did not respond to requests for comment for this story.
“When you stop selling vehicles because of a refresh, there will be a temporary slowdown in sales,” Tsai said. “These things don’t go in straight lines.”
Tsai’s bullishness on Tesla sets him apart from other investors like Ross Gerber, who told BI last week that he didn’t expect Tesla’s stock to rebound this year.
“We’re long-term investors,” Tsai said. “We don’t try to time the market. We focus on the fundamentals, and we think that Tesla’s revenue and earnings will continue to grow substantially in the years to come.”
