The Barefoot Investor has revealed why he refuses to invest in Tesla despite admitting he was wrong about the future popularity of driverless taxis.
Scott Pape, 46, said in his column for The Daily Telegraph that he wasn’t convinced Tesla’s share price will soar if they manage to release their own robot taxis.
His advice was in response to a reader called Trevor who wrote in and asked if the Barefoot Investor had ‘changed his tune’ about investing in Tesla.
‘Ark Invest guru Cathie Wood has just added to her stake in the company in anticipation of the robot taxi revolution,’ he wrote.
‘She forecasts it will be a $10 trillion global market, says Tesla will capture the bulk of that, and predicts it will boost Tesla’s share price tenfold.’
Trevor then described Tesla’s founder Elon Musk as a ‘genius’ who believes ‘robot taxis are the future’ for the company.
‘So, given the share price has been whacked recently, is now the time to buy some shares?’ he wrote.
Australia’s favourite financial investor admitted he had been wrong about the vehicles.
The Barefoot Investor, Scott Pape, (pictured) admitted he was wrong about driverless taxis – but still won’t invest in Tesla
‘For years I’ve been highly sceptical that fully autonomous driving would happen,’ he wrote.
‘Yet I’m happy to admit I was wrong.
‘Waymo, Google’s robotaxi company, has not only got driverless taxicabs, they’re now taking 100,000 paid rides each week in the US (up from 50,000 a few months ago).’
Mr Pape then went on to share that the driverless vehicles have proven to be safer than ‘smelly humans’ driving with less collisions recorded.
‘So, in major cities at least, it looks like robotaxis really are the next big thing,’ he said.
Although admitting he was wrong, the financial guru questioned Ark Invest CEO Catherine Wood’s numbers.
‘I wouldn’t want Cathie in the cockpit of my portfolio: her Ark Invest has destroyed $US14bn ($20.8bn) in wealth over the past decade, according to Morningstar, which tracks her funds,’ he said.
The Barefoot Investor was again cynical, as he revealed the real reason he believes Ms Wood is spruiking Tesla shares to her investors.
‘Looking over her Tesla research, I can understand why,’ he said.
‘It’s pure spin from a fund manager who is trying to boost the stock price of a company she already owns.’
Mr Pape went on to question the validity of Ms Wood’s research, wondering where she came up with her enormous prediction Tesla would have a 1,000 per cent return on investment.
‘Well, Cathie is predicting that, in less than five years, an unbelievable 90 per cent of Tesla’s future earnings will come from something that doesn’t exist yet: Robotaxis,’ he wrote.
‘To be fair, Elon Musk announced that Tesla was on track to have 1 million robot taxis on the road… by 2020.’
Tesla is yet to release its robot taxis, which were to launch in 2020 (pictured stock photo of Tesla vehicles charging)
The Barefoot Investor revealed that Tesla in 2024 has ‘zero robotaxis’, saying that on their website ‘the fine print’ even says the company’s Autopilot ‘does not make the vehicle autonomous’.
Mr Pape said even though the company is yet to launch their robot taxis, he now believes they will – but doesn’t believe investors will become rich based on their release.
‘On this point, I’m still very sceptical. After all, in China, the main selling point of robotaxis is that they’re cheap as chips,’ he wrote.
The investor said the financials don’t add up to give people are large return on their investmenst when in China base fares start from 83 cents compared to the base of $3.73 for a human-driven taxi.
‘That sounds like a driverless race to the bottom to me,’ the Barefoot Investor said.
