- Christopher Tsai is the president and chief investment officer of Tsai Capital.
- One-fifth of Tsai’s $137 million portfolio is in Tesla stock and he told BI he’s buying more.
- Tsai said Musk’s ties to the Trump administration are a “significantly positive event” for Tesla.
For most investors, Tesla’s fortunes are inextricably tied to its CEO, Elon Musk.
But Tsai Capital’s Christopher Tsai says the EV giant can endure even if Musk is 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. We would need to look at the fundamentals and the situation at the time,” Tsai added.
Tesla figures prominently in Tsai’s $137 million investment portfolio.
The 50-year-old is the president and chief investment officer of his eponymous investment management firm. In an SEC filing on February 12, Tsai Capital said it owned 69,700 shares, or about one-fifth of Tsai’s portfolio.
But Tsai Capital held even more Tesla shares just a few months ago. 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. Tesla has increased significantly since our initial investment,” Tsai said.
Musk’s ties to Trump are still a plus for Tesla
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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% since recent highs. The company’s shares closed at around $225 on Tuesday, down from a record high of $448 in mid-December.
The automaker, which initially enjoyed a postelection boost after President Donald Trump’s November election victory, has seen its sales decline in Europe and China.
Musk’s work with the Department of Government Efficiency, or DOGE, has also caused problems for Tesla. Protesters have been descending upon Tesla showrooms nationwide to protest against Musk.
In an interview with the Guardian published on 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 weighs on Tesla, Musk’s involvement with the US government is 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 thinks the “negative market sentiment will disappear at some point.”
There’s room for more than one player in the EV industry
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Tesla has been facing increased competition from rivals like Chinese automaker BYD.
In January, BYD said it sold 1.76 million battery electric vehicles in 2024, putting it in range of the 1.79 million vehicles that Tesla sold in the same year.
Like Tesla, BYD has set its sights on autonomous vehicles as well. Last month, BYD said it would give customers its self-driving software for 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 could provide a nearly 250-mile range on a single, five-minute charge.
Tsai told BI that he didn’t think BYD would displace Tesla because the EV market is huge.
“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 will not be outcompeted by BYD due to pricing.
“History shows that people will pay for something that is superior, even if there is a competing option that is free,” Tsai said.
Tsai attributed Tesla’s declining sales to the refresh of the Model Y. The new Model Y launched in China in January and was made available for order in the US and Europe weeks later.
“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. Gerber told BI’s Matthew Fox last week that he doesn’t expect Tesla’s stock to rebound this year.
“We’re long-term investors. 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,” Tsai said.
Musk and Tesla did not respond to requests for comment from BI.
