ARK Invest Anticipates Tesla's Cybertruck to Achieve Mainstream Success Comparable to Model Y
ARK Invest's bullish call on Tesla's Cybertruck, foreseeing mainstream success comparable to the Model Y. Explore the analysis, market trends, and Tesla's AI ambitions in this industry update.
In a recent analysis, ARK Invest, led by renowned investor Cathie Wood, has expressed its belief that Wall Street is underestimating the potential of Tesla's upcoming Cybertruck pickup. In a post on the fund's website, analyst Sam Korus outlined a compelling path where the Cybertruck would surpass being labeled as a "niche product," which is the prevailing consensus. Korus highlights the possibility that the Cybertruck could achieve mainstream status akin to Tesla's successful Model Y.
According to Korus, early indications are promising, as the Cybertruck has already received approximately 1.5 million reservations. Moreover, data from Google Trends suggests that the Cybertruck's popularity could extend beyond the traditional EV enthusiast market. In fact, search volumes for "Cybertruck" exceeded those for the popular Model Y after Tesla CEO Elon Musk shared updates about the Cybertruck production line in early April. Korus further notes that these searches were primarily originating from regions known for their affinity towards trucks, implying a strong desire to own this unique electric vehicle.
While positive search volume and reservation numbers are encouraging, Korus emphasizes that other significant trends are also at play. The US Energy Information Administration (EIA), which had previously forecasted minimal electric vehicle market share by 2040, was proven wrong as the US EV market share exceeded 5% last year. The EIA has subsequently revised its projections and now predicts EV penetration to reach 14% by 2040 before leveling off. However, ARK Invest holds a more bullish outlook, projecting global EV market share to surpass 70% by 2027, with the US following suit.
ARK's optimistic projection is predicated on the expectation of drastic cost reductions for EVs due to declining battery prices. While industry experts do anticipate cost declines, many analysts are not as optimistic about a 70% market penetration within six years. Notably, the Biden Administration has set a goal of achieving a 50% electric vehicle market share by 2030, with some studies questioning the feasibility of this objective.
ARK Invest, known for its accurate predictions regarding Tesla, remains confident in the success of the Cybertruck as a significant catalyst for the company's growth. Korus suggests that sell-side analysts should consider the potential ramifications of Cybertruck's success for traditional automakers, urging them not to overlook this emerging trend.
In terms of the Cybertruck's current status, Tesla's CEO Elon Musk has indicated that production will commence later this year, with a delivery event scheduled for the third quarter.
Cathie Wood, the founder of ARK Invest, also commented on the flourishing field of artificial intelligence (AI) in relation to Nvidia's recent earnings report. Wood contends that Tesla stands to be the primary beneficiary of the AI advancements, envisioning a revenue total addressable market of $8-10 trillion in autonomous mobility by 2030.
ARK has set a long-term price target of $2,000 for Tesla stock, driven significantly by Tesla's AI investments and its ambitious plans for the robotaxi business. Under ARK's bullish scenario, the robotaxi unit could generate a staggering $613 billion in revenue by 2027, constituting two-thirds of Tesla's overall enterprise value.