Cybertruck Could Boost Revenue, Says Big Tesla Investor

Gary Black, a Tesla bull, believes Musk will deliver on his major promises.

Tesla CEO Elon Musk has made several promises recently, including the production of the long-awaited Cybertruck and finding a replacement for Twitter's top executive.

Investors will likely have to wait until Tesla's investor Day in March where Musk could reveal more of his strategy to boost sales for the electric vehicle manufacturer.

Cybertruck Could Be Sold in 2023

Tesla bull and investor Gary Black believes that Tesla will make Cybertruck deliveries in late 2023 and estimates 10,000 truck deliveries as part of his overall 1.9 million delivery estimate for 2023.

Musk has said production of the Cybertruck could be finally ready and trucks could be sold to consumers during the middle or end of 2023.

After years of waiting, production is scheduled to start at the Tesla factory in Austin, Texas in June. Things seem to be on track, according to Chief Vehicle Designer Franz von Holzhausen. He has just revealed some features of the Cybertruck and promises big surprises.

Von Holzhausen reassures Cybertruck fans that the design is complete. "Is the Cybertruck finished from a design perspective," he was asked on the Ride the Lightning podcast with Ryan McCaffrey. 

The episode was broadcasted on Jan. 15."Yeah!" he responded, but added that the pencil is not completely down.

Musk first unveiled the electric pickup prototype in November 2019 at a promotional event in Los Angeles.The Tesla Cybertruck promises up to 500 miles of electric range, a maximum tow rating of 14,000 pounds, and a base price under $40,000. 

On Nov. 24, 2019, Musk said that Tesla had already received at least 187,000 orders for the Cybertruck, which was five days after the vehicle was unveiled.

Twitter Needs New CEO

Since Musk's $44 billion acquisition of Twitter, his focus has been on increasing revenue for the social media company.

Tesla investors want the billionaire to focus on improving sales for the EV company. Musk said in 2022 that he would step down from CEO of Twitter when he finds a replacement.

Tesla consists of 9.2% of Black's Future Fund Active ETF FFND as of Jan, 17. The EV maker had a terrible fourth quarter because of Twitter "noise" and the impact of lower production output from its factory in China, he said.

"I would like to know when he will announce a CEO for Twitter," Black said.

Future Fund ETF, which was launched in August 2021, bought more shares of Tesla last week at $105 a share, but Black did not disclose the number of shares.

Tesla's brand has not "taken a hit" depite concerns that Musk focused solely on Twitter after taking the company private in October, he said.

When Teslas's favorability dropped, Musk did not continue tweeting conservative stances, said Black.

"Elon is a smart guy and learned to stop tweeting more conservative views," he said. "You don't want your brand to be impacted by your more right leaning views especially if your customer franchise is over indexed to climate-friendly Democrats. It annoys them."

Tesla's Number Two Executive

Tesla's China chief executive Tom Zhu was promoted to run the EV maker's U.S. production plants and sales operations in Europe and North America, according to Reuters. 

Zhu is “very well regarded and built a great business in China,' Black said. "It will be interesting to see how he runs the U.S. business." 

Tesla missed its 2022 delivery target and Musk sharply cut the prices of its two flagship models: the entry-level Model 3 sedan and the Model Y SUV, which constitute 95% of its 2022 deliveries.

The drop in prices range from 6% to 20% and there are two models eligible to benefit from the new U.S. federal tax credit of $7,500.

The price cuts were necessary even though they will impact profit margins in the short-term, Black said.

"They had to do something.to get volume growth," he said. "It's hard to say whether they were too much. They needed to do it.”

The price cuts in the U.S. and China have Zhu's "fingerprints on them," Black said.

Zhu serving as the second highest profile executive of Tesla is a positive for the company.

"His track record speaks for itself, assuming he can do the same in the U.S." he said.

Musk should focus his efforts on Tesla since its stock value dropped by 65% last year.

"We don't want to see Elon go anywhere," Black said. “He brought the business to where it is. We want him to stay.”

Investor Day Reveals

Black and many other investors want Musk to use the stockpile of cash accumulated by Tesla to buy back shares of the company.

During 2022 Tesla produced $9 billion of free cash flow, according to FactSet.

Data that shows Tesla's brand was not harmed by the impact of the Twitter deal could improve the company's valuation, said Black, who has a price target of $370 in 12 months.

Shedding light on whether Tesla will construct Gigafactories in countries such as or Mexico would boost sales.

"If they want to have 10 million vehicles sold by 2030 annually, they need 10 Gigafactories that are producing 1 million" vehicles each since the Fremont plant is producing only 600,000 each year while the factories in Berlin and Austin are manufacturing 250,000 each, he said.

Tesla's Megapacks or battery storage units could generate additional profit of $2 billion annually if 5,000 units were sold at $0.50 a share, he said.

The Lathrop, California manufacturing capabilities for the Megapacks came online during the third quarter and are intended to be sold to utilities

"Elon is a long-term thinker," the investor added.

Tesla Board Needs "Realistic" Growth Rate

Black, managing partner at Future Fund, said he would "love to see the board respond to what has happened to the stock" since there are concerns for Tesla's long-term growth.

The board needs to "come up with more realistic growth rate like 35%, not 50%," he said.

The board of Tesla also should "recognize" that the company is now facing capacity restraint more than demand constraint and should focus on areas such as advertising and PR in order for the company to reach a $3 trillion valuation by 2030. 

"They need to recognize that the world has changed and can't have that mentality anymore," he said.

Tesla has relied on selling cars by word of mouth instead of having a large advertising budget like its competitors. The company does not have a PR team to answer questions from the media.

The company should also focus on increasing education about the safety of Tesla's vehicles since its could increase brand equity as "full-self driving become more of the norm," he said. "They could do a better job."