--- title: "Cathie Wood's Tesla Bet Pays Off Again. But How Long Can It Last?" description: "Cathie Wood's Ark Innovation ETF has seen significant success, largely due to its investment in Tesla, which constitutes 9.6% of the fund's assets. However, Tesla's stock has faced challenges, includi" type: "news" locale: "en" url: "https://longbridge.com/en/news/247549836.md" published_at: "2025-07-08T00:06:19.000Z" --- # Cathie Wood's Tesla Bet Pays Off Again. But How Long Can It Last? > Cathie Wood's Ark Innovation ETF has seen significant success, largely due to its investment in Tesla, which constitutes 9.6% of the fund's assets. However, Tesla's stock has faced challenges, including a 21.9% decline this year and increased competition from companies like BYD. The recent elimination of federal tax credits for EVs may further impact Tesla's sales. Despite potential growth in autonomous vehicles, the high valuation of Tesla raises concerns for investors. Overall, the future performance of Tesla and its impact on the ETF remains uncertain. Cathie Wood, CEO of Ark Invest, oversees numerous exchange-traded funds (ETFs), including a family of funds that invest in technology stocks. These funds have had some success in the past, with the **Ark Innovation ETF** (ARKK -0.91%), the largest one under the company's umbrella, returning nearly 60% over the past year through June 30. That's nearly four times the **Nasdaq Composite**'s 15.7% return during that time. But the fund isn't necessarily for the faint of heart, given its concentration in the tech sector. It seeks to invest in companies at the forefront of "disruptive innovation. One of the Ark Innovation ETF's biggest winners has been **Tesla** (TSLA -6.72%). As of July 2, the fund owned about 2.1 million shares of the electric vehicle (EV) maker. That stake, worth over $630 million, represented 9.6% of the fund's assets, making it the ETF's biggest position. But can Tesla continue to rocket upwards, or is it due for a crash landing? Image source: Getty Images. ## Tesla's electric returns Tesla, one of the "Magnificent Seven" group of technology stocks, has produced strong returns for shareholders. In 2024, the stock gained 62.5%, easily besting the **S&P 500**'s total return of 25% and the Nasdaq Composite's total return of 29.6%. Tesla's automotive business produces most of the company's revenue. In 2024, this fell 6% to $77.1 billion due in part to lower EV prices. Including services (e.g., used vehicles, maintenance services, supercharging, and insurance), the top line from that segment dropped 3% to $87.6 billion. Its other major revenue source is the energy generation and storage segment, which was a bright spot. That business includes selling, leasing, and financing solar energy generation and storage products, and it saw a 67% increase in revenue to $10.1 billion. However, it made up only about 10% of Tesla's total revenue. ## Has the stock boom ended? Arguably, Elon Musk's relationship with Donald Trump, both during the campaign and his presidency, likely contributed to the stock price growth last year. But Musk and Trump have had a falling out, and it's difficult to analyze a company's long-term prospects based on personal relationships with politicians. The stock has lost 21.9% this year through July 2, badly lagging the S&P 500, which has gained 6.8%. Additionally, portions of the Republicans' recently passed tax and spending bill would seem to hurt Tesla's prospects. The new law eliminates the federal tax credits for electric vehicles and solar energy systems, which makes those products more expensive for consumers. Tesla was already facing challenges, including China-based EV giant **BYD** (BYDD.F -0.84%) (BYDDY -1.56%), which has been slashing its prices. The fierce competition has negatively affected Tesla's results. Tesla will report its second-quarter results at the end of the month, but its first-quarter automotive revenue dropped by 20% to $14 billion. That results in a total top-line drop of 9%, and its operating income under generally accepted accounting principles (GAAP) fell by 66% to $399 million. Management has already published its second-quarter vehicle delivery numbers, which showed that its sales remain under pressure. It delivered about 384,000 cars in Q2, compared to over 422,000 in the prior-year period. Management has been investing in new technologies and products, like the fully autonomous Cybercab, which is scheduled to go into production next year. There's a potentially large market for such vehicles, and for the robotaxi service Tesla intends to build, but it's one fraught with challenges. The race to autonomous driving has seen a number of false starts from other companies. It's hard to bet against a Musk-run company given the success he's had in his various ventures. However, given the challenges Tesla faces and its high valuation -- it trades today at a price-to-sales ratio of 11.6 and a price-to-earnings ratio of 173 -- I'd stay away from the stock. And for investors in the Ark Innovation ETF, I wouldn't expect the EV stock to be the biggest positive driver of the fund's future returns. ### Related Stocks - [TSLA.US - Tesla](https://longbridge.com/en/quote/TSLA.US.md) - [ARKK.US - Ark Innovation ETF](https://longbridge.com/en/quote/ARKK.US.md) - [TSDD.US - GraniteShares 2x Short TSLA Daily ETF](https://longbridge.com/en/quote/TSDD.US.md) - [TSLL.US - Direxion Daily TSLA Bull 2X Shares](https://longbridge.com/en/quote/TSLL.US.md) - [TSLQ.US - AXS TSLA Bear Daily ETF](https://longbridge.com/en/quote/TSLQ.US.md) - [09366.HK - XI2CSOPTSLA-U](https://longbridge.com/en/quote/09366.HK.md) - [07766.HK - XL2CSOPTSLA](https://longbridge.com/en/quote/07766.HK.md) - [07366.HK - XI2CSOPTSLA](https://longbridge.com/en/quote/07366.HK.md) - [TSLR.US - GraniteShares 2x Long TSLA Daily ETF](https://longbridge.com/en/quote/TSLR.US.md) ## Related News & Research | Title | Description | URL | |-------|-------------|-----| | 報道：SpaceX 考慮最快 3 月秘密遞交美國 IPO 申請 | 報道：SpaceX 考慮最快 3 月秘密遞交美國 IPO 申請。風險提示及免責條款 市場有風險，投資需謹慎。本文不構成個人投資建議，也未考慮到個別用户特殊的投資目標、財務狀況或需要。用户應考慮本文中的任何意見、觀點或結論是否符合其特定狀況。 | [Link](https://longbridge.com/en/news/277245069.md) | | 埃隆·馬斯克預測特斯拉將在未來 20 年內建立月球工廠，並告訴投資者要 “堅持” 持有特斯拉股票：“會非常值錢” | 特斯拉首席執行官埃隆·馬斯克預測，該汽車製造商將在 20 年內在月球上建立工廠，並敦促投資者持有 TSLA 股票，他相信該股票將顯著增值。儘管歐洲銷售同比下降 17% 且市場份額下滑，馬斯克對特斯拉的未來仍持樂觀態度，包括在機器人技術和人工 | [Link](https://longbridge.com/en/news/277145530.md) | | 埃隆·馬斯克允許 “使用 Starlink 來支持任何幫助烏克蘭的行動”，但預測市場對此有何看法？ | 埃隆·馬斯克限制了俄羅斯對 Starlink 技術的訪問，顯著幫助了烏克蘭在與俄羅斯的衝突中。這一決定使烏克蘭重新奪回了超過 400 平方公里的領土。對 SpaceX 來説，這一影響重大，預計在 2026 年中期進行首次公開募股（IPO）， | [Link](https://longbridge.com/en/news/277238853.md) | | Waymo 的擴張使特斯拉望塵莫及 | Waymo 已將其無人駕駛出租車服務擴展到包括達拉斯、休斯頓、聖安東尼奧和奧蘭多在內的 10 個城市，目標是在年底前實現每週 100 萬次乘車服務。相比之下，特斯拉的 Robotaxi 服務在擴展方面遇到了困難，目前在奧斯丁僅有 44 輛車 | [Link](https://longbridge.com/en/news/276924741.md) | | 內部記錄顯示，政府在特斯拉提出 4300 萬美元索賠之前就已經知道 iZEV 資金接近枯竭 | 內部文件顯示，加拿大交通部早在 2024 年 11 月就已意識到 iZEV 補貼計劃的資金耗盡，但公眾通知卻延遲到 2025 年 1 月 10 日，恰好在該計劃結束之前。這導致了索賠的激增，特斯拉提交了 4300 萬美元的申請。該計劃的突然 | [Link](https://longbridge.com/en/news/277215039.md) | --- > **Disclaimer**: This article is for reference only and does not constitute any investment advice.