Tesla Inc TSLA shares are going to take a sharp dive as interest rates rise in the aftermath of the COVID-19 pandemic, Lansdowne Partners fund manager Per Lekandertold CNBCon Tuesday.
What Happened: Lekander has a short position on the Tesla stock and is bullish on German automakerVolkswagen AGVWAGY.
The market value of Elon Musk’s electric vehicle company jumped to over $800 billion in January, before dropping to less than $600 billion in February and is now up again at about $649.7 billion.
Lekander believes there is an opportunity for incumbents to make a comeback in 2021.
“There are a few golden nuggets, which I think are going to be long-term winners,” Lekander told CNBC’s Squawk Box Europe.
“But in the short term, my guess if I’m right on the macro call that interest rates go up and the market wakes up to (the fact that) the incumbents are not as badly positioned as they think, then yes, I think Tesla is going down.”
Drawing comparisons with the dot-com boom of 1999, he pointed out howCisco Systems IncCSCO, a poster child in 2000 has a much higher market value today than it had then.
“It didn’t stop it from going down 80% first,” Lekander said.
Why It Matters: Earlier this week, Volkswagenrevealed plansto build half a dozen battery cell plants in Europe and expand charging infrastructure for electric vehicles as it aims to overtake Tesla in the race to speed up mass adoption of electric vehicles.
UBS analysts earlier this month said Volkswagen will emerge asa prime rivalto Tesla by 2025 in the EV segment over newer EV-exclusive rivals likeNio IncNIO 0.02%orXpeng IncXPEV 0.13%.
Price Action: Tesla shares were down 0.5% at $673.25 in early pre-market trading session on Wednesday.
