Fast Facts
- Tesla stock has taken a tumble.
- Analyst Gary Black thinks Cybertruck could be a key to its recovery.
- But Tesla has to clear major hurdles to reach its goal.
With Tesla (TSLA) stock having fallen 34% this year, many who once sang the EV company's praises are now losing faith in CEO Elon Musk's vision.
After years of promises, Musk finally delivered on his much-hyped Cybertruck — but the launch has come with many reports of flaws, such as the headlight design making snowy conditions difficult to navigate and corrosion issues on the stainless steel alloy.
Related: Despite Tesla's 'category 5 hurricane,' top analyst remains devoted
However, one analyst thinks that despite the futuristic vehicle's flaws, it can be a boon to Tesla in 2024.
The Future Fund's Gary Black took to X on March 20 to tweet about the topic, saying that the Cybertruck could become "a key catalyst to 2025 earnings if $TSLA can continue to scale up production."
According to the Future Fund's estimations, Tesla is currently producing 400 Cybertrucks a week and could be producing 1,000 a week for the fourth quarter, translating to 30,000 deliveries of the vehicle this year and $15,000 in profit for Tesla.
Black also says the Future Fund estimates "100K CTs delivered at a $20K gross profit per CT" in financial year 2025. "This could translate to $.50/share in incremental EPS which is unlikely in TSLA consensus FY’25 ests of $4.00."
$TSLA Cybertruck could become a key catalyst to 2025 earnings if $TSLA can continue to scale up production. We estimate TSLA is currently producing 400 Cybertrucks per week and could be producing 1,000/week by 4Q. We estimate TSLA will deliver 30K CTs in FY’24 @$15K profit per…
— Gary Black (@garyblack00) March 20, 2024
When one follower asked Black if he was including the $5,600 vehicle manufacturing tax credit in his estimates, Black said no as it's "hard to know what the actual CT profitability is since this year we have the Foundation series $20K premium."
No - hard to know what the actual CT profitability is since this year we have the Foundation series $20K premium. TSLA previously has said CT is unprofitable but that was when they were producing 200/week. At 100K annual delivs I believe TSLA would generate +$15K gross profit…
— Gary Black (@garyblack00) March 20, 2024
Elon Musk has remarked in the past that Tesla's goal is to make 200,000 Cybertrucks a year, with 250,000 being the goal for 2025. However, he's also made comments stating that manufacturing the vehicle to begin with presents major hurdles.
"We dug our own grave with the Cybertruck," Musk said during Tesla's Oct. 18 earnings call in 2023. "It is going to require immense work to reach volume production and be cashflow positive at a price people can afford. It will take a year to 18 months before it is a significant positive cashflow contributor."
Related: Tesla Cybertruck's futuristic design has a critical flaw that will cost you money
