Ark Investment Management founder Cathy Wood recently reiterated her view that deflationary trends are at work due to falling prices due to innovation. However, one Tesla short seller disputed her view. Wood on Saturday retweeted a post by Sam Korus, director of autonomous driving technology and robotics research at Ark, in which he shared a chart from Cox Automotive showing U.S. vehicle prices for various categories in September.
The chart shows modest price increases across most vehicle categories except EVs, midsize and subcompact SUVs/crossovers. Electric vehicles saw the largest decline, at 22.4%, while hybrid vehicle prices rose by 20.6%. Overall, U.S. auto prices fell a modest 0.7% in September.
Wood commented that this is an important example of price reductions associated with "technological innovations" such as battery pack systems. The fund manager used the data to take a jibe at the Fed.
"The Fed continues to make decisions based on lagging indicators. Artificial intelligence, blockchain technology, robotics and multi-omics sequencing will exacerbate deflationary pressures," she wrote.
In another post, Wood wrote: "The Fed's policy actions are based on lagging indicators, specifically the various personal consumption expenditures (PCE) deflators. Investors appear to believe the Fed is on the right track. We believe deflation will be a big surprise next year."
However, Tesla bearish analyst Gordon Johnson has a different take on falling electric vehicle prices. In reply to Wood's post, he said: "Or, the price of electric cars is actually collapsing because: demand < supply = lower prices." He believes that it is not innovation that drives down prices, but a supply and demand mismatch that drives down prices.