'He works great under pressure': Katie Wood on Musk and Trump conflict and robotaxis

«Elon Musk works well under pressure - and much of it is of his own making,» says Katie Wood, founder of investment firm ARK Invest and one of Tesla's longtime fans. In the latest installment of her Youtube show In The Know, she explained the implications of a public conflict between Ilon Musk and Donald Trump, why Tesla can't distance itself from the government, and what to expect from a potential robotaxi launch on June 12. 

Katie Wood began her show by discussing fiscal policy and commented on the fiscal budget legislative bill around which the conflict between Donald Trump and Ilon Musk has erupted. She mentioned that the «big, beautiful bill,» as the US president calls it, is causing «some turmoil» as Musk and Trump have different views on it. Wood noted, «I think Ilon, Tesla and investors are increasingly starting to realize how strong the role of government is here.»

According to her, companies associated with Musk are heavily dependent on regulatory and federal budget decisions. His space company SpaceX has received government contracts worth $22 billion, and the activities of neurotechnology startup Neuralink depend on the FDA (U.S. Food and Drug Administration). According to Wood, this also applies to other areas of Musk's companies, where further development depends on political decisions.

Commenting on Musk's behavior in recent days, Wood noted that he has «started to backtrack»: for example, withdrawing his hasty announcement to decommission the Dragon spacecraft used by the U.S. to deliver people and cargo to the International Space Station. She added that the conflict with Trump has already caused reputational damage for Tesla - and Musk openly acknowledges this. «I think he's trying to distance himself from the state and from association with any party,» Wood said.

Separately, she mentioned that there is a hypothesis that everything that happened - from Musk's statements to the very escalation of the conflict - could have been partially planned. According to her, such a scenario cannot be ruled out. Wood also mentioned a possible «conspiracy theory»: the public clash between Musk and Trump could be related to trade talks between the U.S. and China. Trump has been engaged in a tough dialog with Beijing, and China is a key market for Tesla in both production and sales. Wood said Musk has no interest in souring relations with Beijing, especially amid talks over rare earth metals.

Wood pointed out that China agreed to resume exporting rare earth materials for three Detroit-based automakers. «Tesla is not part of this deal yet, but it's a start. It's also interesting. We think there's more hidden here than meets the eye,» Wood said. 

According to Wood, Musk and Trump's conflict is «out of control». She added that when asked during an internal meeting what she would recommend if she were on the company's board of directors, she said, «One thing I've noticed over the years that we've held Tesla stock is that Elon Musk works well under pressure - and he creates a lot of it himself.»

Wood noted that ARK, which issues and manages exchange-traded funds (ETFs),  has long been used to volatility in the portfolio and tries to take advantage of it. Tesla shares rose markedly after the election, but as Wood emphasized, other securities in the portfolio behaved differently - the fund reduced its stake in Tesla by nearly half a billion dollars and reallocated capital to other assets.

ARK's evaluation of companies it selects for investment is based on a combination of several metrics, including governance, quality of execution, technology leadership and sustainability of competitive position. Wood recalled that the fund had previously downgraded Tesla on the governance criterion - during the period when the Securities and Exchange Commission (SEC) launched an investigation against Musk. This, she said, became a major distraction for the entire team. Now this Tesla score remains the same - because ARK has been through similar situations with Musk's company before. 

ARK Invest is now betting on robotaxis, a new strategic direction for Tesla's business. Wood recalled that the company is expected to present new results in this area in June, and it is this event that will determine the revision of one of the valuations in the fund's model.

«I think his confidence in launching a robotaxi is growing. He does expect the project to succeed - of course how quickly that happens will depend on regulation. And I would encourage the head of the board and others to just urge him to go back to the future - to go back to really changing the way the world is going to function,» Wood said.

As part of its evaluation system, ARK pays attention to so-called competitive barriers - factors that make companies difficult for rivals to penetrate: it can be a technological advantage, control over the supply chain or patent protection. According to Wood, it will be extremely difficult to beat Tesla both in the robotaxi segment and in the development of humanoid robots. And it is the second component that is beginning to play an increasingly important role in the company's strategy: «It's becoming a bigger part of the story than we originally put into the model.»