Why boss of FTSE 100 giant Auto Trader might ditch his Tesla
The boss of FTSE 100 Auto Trader has revealed he may ditch his Tesla in the future as rivals to Elon Musk’s electric car giant become more competitive on price.
Nathan Coe, speaking on the latest episode of Morning Wire‘s Boardroom Uncovered podcast, added that Tesla’s position as a relatively low-cost brand compared to its rivals is starting to disappear.
The CEO said Tesla is facing increased competition from other manufacturers, especially those from China.
The CEO’s comments were not in reference to the recent stock market struggles Tesla has experienced in recent weeks.
The company’s share price has been on the slide as CEO Elon Musk gets more involved in President Donald Trump’s second administration.
Musk joined Tesla in 2004 and is the company’s highest single shareholder, with a 13 per cent stake, which is currently worth more than $95bn.
Despite the recent share price fall, Tesla’s stock is still almost 30 per cent higher than it was a year ago and the business is valued at more than 100 times its earnings.
Last week, Baillie Gifford slashed its stake in Tesla to a record low as a major shareholder has called on Musk to step down from the company.
The Edinburgh-based investment manager first invested in Musk’s electric car company in 2013 and has been a strong backer of the billionaire’s firms ever since.
However, a spokesperson told Morning Wire that Baillie Gifford had now reduced its stake to just 0.06 per cent of the company’s shares, including its investment trusts.
Tesla is being squeezed by Chinese rivals
Speaking on the latest Boardroom Uncovered episode, Coe said: “I’m not the most sophisticated of car buyers. Obviously, I use Auto Trader loads.
“I went with the Tesla because at the time we were just doing a very simple maths of how much range you get for how much money for the car.
“This isn’t as true now necessarily, but at the time the Tesla was just the best value for money on that kind of simple equation of how much range does a car have.
“Does it kind of work and does it link to Spotify and all those other very important things that you want in a car?
“But it was mostly just down to range and the cost of the car because they have been lower cost. That’s why they’ve gained quite a lot of share.
“They’re not a low cost car but relative to other EVs they were at the time. Now that’s all starting to even up.
“Actually we’re seeing range volumes coming up. We’re seeing a lot of Chinese manufacturers. We’re seeing low price point.
“So I imagine the next decision might actually end up being different.”
FTSE 100 boss on how to fix the London Stock Exchange
Also in the latest Boardroom Uncovered episode, the boss of Auto Trader said the government needs to encourage more investment into companies listed on the London Stock Exchange to revive the fortunes of the City.
Coe added that the UK doesn’t have the same level of “encouragement or incentivisation” around building tech businesses.
He also added that it “feels a bit lonely” as one of the largest technology companies in the UK and that’s a stark difference between this country and the US.
Coe called on the government to “spur on” areas such as building technology companies and AI “where we can be the best in the world and it will attract a lot of investment”.
The Boardroom Uncovered interview comes after shares in Auto Trader hit an all-time high at the end of September 2024 while its revenue jumped by 14 per cent to more than £570m during its latest financial year.
In January this year, Morning Wire reported that Auto Trader is to relocate its headquarters from a building named after a Manchester legend to a new base worth £87m.