Cathie Wood Shares Optimism For Cybertruck, Says It Will Destroy Rivals' Pricing Structure

Zinger Key Points
  • Tesla's Cybertruck is expected to launch in 2023.
  • The highly anticipated vehicle could help Tesla grow its user base, with pickup trucks a key automotive category.

One of the most anticipated launches in recent years is the Cybertruck from Tesla Inc TSLA. With the pickup truck set to launch in mid-2023, Cathie Wood is sizing up its potential against similar vehicles from rival auto companies.

What Happened: During its fourth quarter financial report in January, Tesla said it was on track to begin production of the highly anticipated Cybertruck later in 2023 at Gigafactory Texas.

First unveiled in 2019, the Cybertruck has seen strong demand and reservations but has had its release delayed several times.

The Cybertruck had over 250,000 reservations a week after reservations opened. Third-party estimates noted that, in November 2022, there were as many as 1.5 million reservations for the Tesla electric pickup truck.

And although the Cybertruck has been highly anticipated, Ark Invest CEO Cathie Wood thinks it could be a “sleeper” in the automotive sector.

“Tesla’s Cybertruck is the sleeper that could destroy the pricing structure of light duty trucks, the lifeblood of most traditional auto companies in the US,” Wood tweeted on Saturday.

The tweet was made in response to Ark Chief Futurist Brett Winton, who pointed out on Twitter that Tesla's margins in certain vehicle categories have been better than those of traditional automakers.

“In cars Tesla is delivering transformative margins in vehicle segments where traditional manufacturers can barely tread water. Tesla could opt for similar margins in trucks and by doing so push all of its incumbent domestic competitors onto its Cybertruck blade,” Winton tweeted.

Related Link: Tesla Cybertruck Featured On The Simpsons Episode Ahead Of The EV's 2023 Release 

Why It’s Important: Light-duty trucks from traditional automakers have dominated the list of best-selling vehicles for years.

The following were the best-selling vehicles in the U.S. in 2022.

  • 1. F-Series trucks from Ford Motor Company F: 653,957 units
  • 2. Chevrolet Silverado from General Motors Company GM: 513,354 units
  • 3. Ram pickup truck from Stellantis STLA: 468,344 units
  • 4. Toyota RAV4 from Toyota Motor Corporation TM: 399,941 units
  • 5. Toyota Camry: 295,201 units
  • 6. Tesla Model Y: 252,000 units
  • 7. GMC Sierra from General Motors Company (NYSE: GM): 241,522 units
  • 8. Honda CR-V from Honda Motor Company HMC: 238,155 units
  • 9. Toyota Tacoma: 237,323 units
  • 10. Jeep Grand Cherokee from Stellantis: 223,345 units

A quick look at the list shows that the top three selling vehicle models in the United States were all pickup trucks and that five of the 10 best-selling vehicles in the U.S. were pickup trucks. In fact, the F-Series from Ford has been the best-selling vehicle for 41 straight years. Ford introduced an electric version of the pickup truck, which saw strong demand but has struggled to keep up with supply.

Amid strong sales of traditional pickup trucks and a large number of reservations for the Cybertruck, expectations for Tesla's new truck are running high. Company CEO Elon Musk even cautioned that expectations for 2023 could be too high.

“I always try to downplay the start of production because the start of production is always very slow. It increases exponentially, but it’s always very slow at first. So I wouldn’t put too much thought into start of production. It’s kind of when volume production actually happens, and that’s next year,” Musk said on the company’s fourth quarter conference call.

Ark Funds is among the biggest bettors of Tesla and the potential of the Cybertruck. The ETF company has laid out a price target of $500 on Tesla shares by the year 2026.

Tesla remains a key holding of Ark Funds and is the largest holding of both the Ark Innovation ETF ARKK and Ark Autonomous Technology & Robotics ETF ARKQ. Tesla is also the seventh-largest holding of the Ark Next Generation Internet ETF ARKW.

Read Next: Is Tesla's Cybertruck A Real Truck? A Survey Poses The Question 

Photo: Shutterstock

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Posted In: NewsSpecialty ETFsTrading IdeasETFsARK Investauto stocksBrett WintonCathie WoodCybertruckelectric pickup truckselectric vehiclespickup trucks
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