Cathie Wood, the founder, CEO, and CIO of Ark Invest, tweeted her views about the electric vehicle (EV) unit sales forecast for the overall EV industry. “The difference between linear and exponential growth rates should continue to throw analysts’ forecasts for $TSLA and other EV manufacturers off course,” Cathie noted.
Cathie’s tweet was essentially an explanation of another tweet by Ark Invest’s Director of Research Autonomous Technology & Robotics, Sam Korus. On his Twitter (TWTR) handle, Korus outlined three graphs relating to global EV unit sales.
The first graph was related to the global EV adoption curve (battery EV unit sales) so far in 2022. The second graph fitted a diffusion curve over the first graph to smoothen the curve. And in the third graph, Korus compared the diffusion curve with a linear growth curve for global EV adoption.
The diffusion curve showed exponential growth and projected approximately 59 million EVs sold globally in 2027. On the other hand, the linear curve projected around 21 million EVs sold globally.
Tagging Korus’s tweet, Cathie noted that there is a difference of 40 million (2027) between the two curves, which will continue to off-track analysts’ forecasts for Tesla and the EV industry.
As per Cathie, analysts generally follow a linear curve for projections, giving modest growth assumptions. Meanwhile, Ark Invest has considered exponential growth assumptions for global EV sales that somewhat match the diffusion curve in the graph.
American EV maker Tesla (TSLA) is one of the fastest growing and largest EV makers globally. Cathie’s funds, which invest in disruptive technology, have high exposure to TSLA stock.
Cathie’s tweet and EV sales forecasts were received with criticism. Twitterati replied with sarcasm, doubting how the EV makers will source scarce raw materials like lithium, to manufacture such a huge number of EVs. A few even quipped at her for pumping and dumping the TSLA stock using these tactics on prior occasions.
Meanwhile, some with a rather genuine interest in the analysis are worried about the pressure on power grids to sustain the huge EV demand. Despite the negativity in Cathie’s EV forecasts, global economies prioritize shifting toward a cleaner and greener environment. EV makers worldwide are poised to be the biggest beneficiaries of this shift in the long run.