Cathie Wood says value of traditional automakers could fall more than 60% in next 5 years

Driverless vehicle interior with futuristic dashboard for autonomous control system

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Cathie Wood and her company, ARK Invest, believe the auto industry will expand over the next few years, at least in terms of the number of vehicles sold. However, she believes automakers will become themselves less valuable as industry shifts to electric vehicles and self-driving options.

Additionally, ARK Invest predicted that traditional automakers could see their value decline by more than 60% over the next five years as autonomous taxi services become popular, potentially impacting overall auto sales.

In its forecast, ARK pointed out that in 2021, the number of light vehicle vehicles sold worldwide will total 78 million and that the enterprise value of automakers will be around $3.5 trillion.

According to data from IHS Markit, auto sales will grow at a compound annual growth rate of 4.7%, reaching a new high of 98 million units in 2026.

ARK’s note states: “ARK’s baseline scenario for non-autonomous electric vehicles is consistent with the consensus view that unit sales will increase by 20 million over the next five years, but that global automakers’ enterprise value will likely increase by about 20% to about 2, $8 trillion will drop. ”

The report added that if Wood and her team’s research is correct that autonomous taxi services are gaining momentum, vehicle unit sales are likely to fall 8% to 72 million. Additionally, traditional automakers’ enterprise values ​​would drop more than 60% to $1.3 trillion.

ARK’s note said: “We believe the auto industry is undergoing two profound changes that are breaking the link between unit sales and shareholder value: a shift from internal combustion engines to electric vehicles and, albeit early, a shift from human-powered to autonomous vehicles .”

Associated ARK ETFs along with big-name automakers and their year-to-date price action: ARKK Innovation ETF (NYSEARCA:ARKK) -61.1%ARK Autonomous Technology & Robotics ETF (Bats: ARKQ) -34.4%Ford Motor Company (F) -44%Toyota Motor Corporation (TM) -15.2%Volkswagen (OTCPK:VWAGY) -36.9%General Motors (GM) -45.6%and Honda Motor Co (HMC) -13.2%.

For more information, see ARK’s full investor statement. Cathie Wood says value of traditional automakers could fall more than 60% in next 5 years

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