ARK Invest: What Will Demand Be For The Cybertruck?

[Old Spice]

What Will Demand Be For The Cybertruck?

https://ark-invest.com/articles/analyst-research/what-will-demand-be-for-the-cybertruck/

Analysts, forecasting agencies, and auto manufacturers once thought electric vehicles (EVs) would become little more than a niche product. Will they be wrong about the Cybertruck as well?

In ARK’s view, the low expectations[1] for Tesla’s Cybertruck are based on a blind spot. Today, most automakers fund the development and sales of unprofitable EVs with profits from their gas-powered truck sales. If the Cybertruck were to disrupt that profit center, traditional automakers could end up in trouble.

In ARK’s first year, 2014, the US Energy Information Administration (EIA) forecasted that long range electric vehicles would have little to no US market share in 2040. Last year, the market share of US EVs topped 5%[2] so, now, having increased its forecast each year, the EIA expects US EV market share to plateau at ~14% in 2040, as shown below. According to our research, global EV market share is likely to scale to 70%+ by 2027,[3] and the US will not be far behind.

Source: ARK Investment Management LLC, 2023, Based on data from EIA Annual Energy Outlook (2022); Irle 2022.


For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security. Forecasts may not be realized.

The EIA expects trucks to constitute 69% of all vehicles in the US by 2050, even though electric trucks will not gain traction beyond 10% share of the total, as shown below.

Source: ARK Investment Management LLC, 2023, based on data from EIA Annual Energy outlook 2022.

For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security. Forecasts may not be realized.

We disagree. In addition to 1.5 million existing Cybertruck reservations,[4] early Google Trends data suggest that the Cybertruck could be as mainstream as the Tesla Model Y. On April 2, 2023, just as Elon Musk tweeted that he was walking the Cybertruck production line,[5] the number of searches for the Cybertruck on Google exceeded those for the Model Y, as shown below. Notably, Cybertruck search volume originated in truck-loving geographies, potentially suggesting desire to buy.

Source: Google Trends 2023.

For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security. Forecasts may not be realized.

While sell-side analysts may be uncomfortable forecasting exponential EV growth, we believe it would be a mistake for them not to consider the implications Cybertruck success could have for traditional automakers.

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[cvalue13]

The EIA expects trucks to constitute 69% of all vehicles in the US by 2050

 

[charliemagpie]

Excellent.

I reckon there is a general train of thought which says 250,000 to 500,000 at a stretch per year.

imo they have plans to expand quickly well beyond that.

 

[Yumyum]

All this math means nothing without the price of the truck.

 

[Jhodgesatmb]

All this math means nothing without the price of the truck.

All this ‘math’ means nothing at all

 

[Crissa]

The EIA's estimates are already useless, why write an article about them without competing estimates?

As you can see from the second chart, BEVs basically exceeded all their estimates, except that year that happened before a once-a-century pandemic.

-Crissa

 

[cvalue13]

All this ‘math’ means nothing at all

Take as maybe an example:

Consistent with the copy, this graph that ARK compiled suggests that the EIA 2022 forecast for total EV market share in the U.S. in 2040 is just less than 14%

But the very next graph ARK compiled is saying that in 2040 it will be … huh? … >25% for EV cars plus ~8% for EV trucks?

 

[ldjessee]

Take as maybe an example:

Consistent with the copy, this graph that ARK compiled suggests that the EIA 2022 forecast for total EV market share in the U.S. in 2040 is just less than 14%

But the very next graph ARK compiled is saying that in 2040 it will be … huh? … >25% for EV cars plus ~8% for EV trucks?

Maybe the remainder are EV motorcycles, side-by-sides/ATVs, and other commercial trucks (semis, garbage trucks, etc).

 

[cvalue13]

Maybe the remainder are EV motorcycles, side-by-sides/ATVs, and other commercial trucks (semis, garbage trucks, etc).

i think I deciphered now that I’ve had a beer

• because EIA says 69% of vehicles will be trucks in 2050, presumably the forecast is that in 2040 they’re something like 65%
• if EV trucks are 8% of 65%, they’re ~5% of total cars on road in 2040
• of the 35% that are cars in 2040, ~26% are EV, which is ~9% of total cars on road in 2040
• So, ~5% EV truck + ~9% EV cars = ~14% of total

Hopefully that wasn’t *extremely* obvious to others, but by the way the info was presented it sure wasn’t to me.

 

[Jhodgesatmb]

i think I deciphered now that I’ve had a beer

• because EIA says 69% of vehicles will be trucks in 2050, presumably the forecast is that in 2040 they’re something like 65%
• if EV trucks are 8% of 65%, they’re ~5% of total cars on road in 2040
• of the 35% that are cars in 2040, ~26% are EV, which is ~9% of total cars on road in 2040
• So, ~5% EV truck + ~9% EV cars = ~14% of total

Hopefully that wasn’t *extremely* obvious to others, but by the way the info was presented it sure wasn’t to me.

What is obvious is that the EIA has been supremely wrong for years and every time they revise their projections they remain wildly off. It reminds me of Nokia in the 90s. They listened to ‘market analysts’ (who were only listening to each other) and they lost. The EIA must be funded by legacy auto and oil because otherwise their revised projections just don’t make sense. That is why I said it is all worthless. If the original and revised EIA projections are that far off then everything downstream is worthless.

 

[WHIZZARD OF OZ]

All this math means nothing without the price of the truck.

How does $79,999.99 sound, if it is in fact the up-coming TRI CYBRTRK.....over $10K more than the 2019 price put forward by Elon. It would mean alot to me, especially when it comes to Australia. ( Fingers Crossed )

 

[CYBER PARK]

Isn't the EIA's forecast conservative?

 

[charliemagpie]

How does $79,999.99 sound, if it is in fact the up-coming TRI CYBRTRK.....over $10K more than the 2019 price put forward by Elon. It would mean alot to me, especially when it comes to Australia. ( Fingers Crossed )

Mate, with some luck, there's a possibility of AU deliveries in say 2026 (fingers crossed) - that's approximately seven years after its initial release.

By then, the only way under $79,999 is by advanced miracle of manufacturing.

Just to make our day brighter, $79,999 plus taxes would ONLY be about AU $150,000 lol

 

[Crissa]

Isn't the EIA's forecast conservative?

It's more than conservative, it consistently assumes that new models and production capacity will not come online, despite the factories being built. California already exceeds its estimates for five years out. And we have tons of EV busses and trucks on order in the state.

-Crissa

 

[intimidator]

All this math means nothing without the price of the truck.

Ding Ding Ding.

YES, there are over a million reservations for the CyberTruck. But how many put down a $100 dollars when they saw the $39,000 price, or $49,000 price in November 2019? We have to assume A LOT.

If the initial version, with unknown specs and # of motors, is a "Platinum" version and is $89,000 plus FSD, etc, how many of those milion + will convert at that price?

Every car analysis on the planet will tell you, no matter what brand of vehicle it is (see Model X) there are limited buyers that will spend close to $100,000.

Elon has already warned us the CyberTruck will be expensive. Let's believe him.

Maybe someday in the future, 2030? (hey it took us 4 years to get this close) Tesla will be able to crank out less expensive versions, but I am not waiting for that to happen. 250,000 CyberTrucks sold in 2025 would be my guess. Even that is a lot if is over $80,000.

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