Tesla (TSLA) "is a solution" to the economy's turmoil, says Ark Invest CEO Cathie Wood.
The investment firm's ARK Innovation ETF (ARKK) carries a holding of the electric vehicle giant's stock of 9.05%.
"Traditional industries are in harm's way as innovation pushes through, accelerated by some of the turmoil out there," said Wood during an exclusive interview with Yahoo Finance Live.
Wood cites gasoline demand over the summer, which plunged to levels not seen since 1997.
"That's real demand destruction," she said. "It couldn't have happened without electric vehicles at the margin, taking a huge share from traditional automobiles."
Her team of analysts believe gas powered vehicles will be obsolete within the next five to 10 years.
"The traditional auto industry has to figure out a way to migrate into electric vehicles and into the next big phase we think Tesla is leading — the autonomous taxi platform phase," she stated.
Wood said the U.S is already in a recession, but she believes the economic contraction is "going to be a function of this massive inventory overhang and have an inventory correction."
"This is a shock though to the system, and this idea that we have an inventory overhang we think is going to get bigger as consumers pull back," she said, citing an upcoming holiday season which "is going to be pretty tough," she said
The markets are in correction territory as inflation remains hot, with the Federal Reserve likely to hike interest rates again at its next meeting in November.
"All stocks are experiencing difficulty in this environment as the market tries to understand how far the Fed is going to go and how deep this recession is going to be," said Wood.
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