With Chinese smartphone giant Xiaomi Corporation‘s XIACY entry into the electric vehicle arena, Gene Munster of Deepwater Asset Management issued a cautious note for EV frontrunner Tesla, Inc. TSLA.
Investor optimism towards Tesla persists despite increased competition, driven by a focus on the mid-and long-term outlook, Munster observed. He commented, “I think the market is looking one to two years down the road.” Tesla’s stock remains one of the top performers in the S&P 500 this year, despite a less dynamic second half.
”China is a light year away from an investor’s mind,” Munster said. “This potentially explains Tesla’s outperformance.”
He added that Deepwater’s 2024 tech predictions include Tesla maintaining its U.S. market share, contrary to market expectations of a significant drop.
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Competitive Dynamics: Traditional automakers, Munster said, are just in a ”really bad place.” A decade from now, there would likely be a repeat of what happened in the 70s and 80s, he said. In the mid-70s, it was the Japanese automakers even as many Americans scoffed at the idea, he added.
By 1989, the Honda Motor Co. HMC Accord was the best-selling car in America, Munster said. ”It’s hard to imagine that Chinese automakers are going to be finding a receptive audience from US car buyers, but political, the geopolitical environment, can change,” the tech expert said, adding “it can warm.”
”Tesla should be concerned about these Chinese makers, should be concerned about what Apple’s going to do and should not be concerned about what traditional autos can do as they are moving in full throttle reverse,” Munster said.
Munster’s concerns align with recent reports suggesting that BYD Co. Ltd. BYDDY BYDDF is poised to surpass Tesla as the leading battery EV maker in the fourth quarter.
The venture capitalist also shared his expectations about an Apple Inc. AAPL Car in a post on X, formerly Twitter. ”Given the news that Xiaomi is getting into the EV game, I wanted to reiterate my view on the Apple Car,” he said.
”It’s clear $AAPL is working on a car, and I put the odds at 60% that it sees the light of day in the next five years.”
Rumors about the iPhone maker working on a car have been doing the rounds for a while, with the company reportedly doing the groundwork as early as the 2000s. The company, however, hasn’t officially confirmed any work on that front.
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