Marc Faber, a famous Swiss investor based in Thailand, leads a multi-faceted career. He is the standing director of Marc Faber Ltd., an investment advising and fund managing company that enjoys global business. Faber also serves as the director, advisor, and shareholder of a number of other investment funds, most of which focus on emerging and frontier markets. Finally, Faber publishes the popular Gloom Boom & Doom Report newsletter, a must-read for those interested in investments and the directions in which markets are shifting.

faber2Faber’s most recent newsletter attracted a fair amount of attention when it was released just a few hours ago. According to the venture capitalist, Tesla is going down.

“What they produce can be produced by Mercedes, BMW, Toyota, Nissan. Anybody in the world can make it eventually, at much lower cost and probably much more efficiently,” Faber told CNBC’s “Trading Nation.”

“The market for Toyota and these large automobile companies is simply not big enough, but the moment it becomes bigger, they’ll move into the field and then Tesla will have a lot of competition.”

That increased competition spells trouble for Tesla, according to Faber. When the auto-tech mogul is forced to create its sleek EV’s at prices lower than the must more established brands, it’s likely to wreak havoc on Tesla’s business and stock performance.

“I Think Tesla is a company that is likely to go to zero eventually,” Faber concluded.

Faber is definitely on point in his observation of all the major auto brands finally making strides towards the EV market. According to Bloomberg, Mercedes-Benz recently announced its plans to create an entire line of new electric vehicles, including two electric SUVs and two electric sedans to be released under a new brand. BMW has already started making its own electric cars and recently took a shot at Tesla in an advertisement for making drivers with pre-orders wait for their new vehicles to be manufactured.

tesla2That said, Tesla isn’t backing down. According to Tesla’s business development executive Diarmuid O’Connell, Tesla’s competitors have “delivered little more than appliances” in contrast to Tesla’s willingness to rethink vehicles from the ground up.

Faber also came out as an advocate of shorting Tesla. On Monday, he said “if you are an investor with a lot of nerves and you sleep well at night anyway, then you could hedge the portfolio somewhat by selling short some stocks that are overvalued and are likely to go down.” He then provided Tesla as an example.

Tesla’s press office has yet to comment on Faber’s statements, and will likely neglect to address his criticism. Elon Musk, CEO and founder of Tesla, is also the founder of SpaceX, the first private company to build a rocket and successfully send it into space, and Solar City, a solar panel manufacturer and installer. The tech tycoon has fascinated millions with his unprecedented innovations, and his vision has earned the confidence of as many buyers as his companies’ failings have earned the distrust of investors. Only time will tell if Tesla becomes a major facet of the automotive industry or is beaten out by competition.

 

Leave a Reply