Future Fund LLC's managing director, Gary Black, says that a smaller Tesla Inc. (NASDAQ:TSLA) pickup truck would significantly boost the EV giant's total addressable market.
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What Happened: "A smaller Tesla pickup would be a compelling new form factor that could significantly expand Tesla TAM and earnings potential," the investor said in a post on X on Tuesday.
He cited an interview of Tesla's VP of vehicle engineering, Lars Moravy, at the X takeover event, where Moravy hinted at a smaller pickup truck for the company, saying it was in the design studio.
"We estimate a smaller pickup could add 420K incremental units per year to Tesla deliveries, with little or no cannibalization given the current limited consumer appeal of the Tesla Cybertruck," Black said in his post.
Black also called Cybertruck a "disaster" and said it was "unprofitable" for Tesla, citing poor sales of the pickup truck. "It's too big, too expensive, and impractical for most customers who want pickups," the investor said.
He added that a smaller, $50,000 pickup truck could capitalize on Tesla's brand and earn the company "15-20% margins" on a global scale. However, the company would need to listen to the consumers instead of letting "engineers decide what's best for them."
Why It Matters: The comments came when Tesla's co-founder, Martin Eberhard, had criticized the company's decision to scrap plans for an affordable $25,000 model in favor of the Cybertruck, which he said looked like a "dumpster."
Besides Eberhard, Black had also criticized Elon Musk and Tesla for the affordable variant in the Tesla lineup being a scaled-down version of the Model Y, which the investor said would lead to cannibalization.
Black had also criticized the company's Q2 earnings call, labelling it a disaster and calling the Robotaxi "kabuki theater" following a disappointing quarter for Tesla, which saw sales tumble.
Elsewhere, despite the criticism, Musk remains optimistic about Tesla and has hinted that a $20 trillion valuation for the company could be possible in the future, but warned that such a feat would need extreme execution.
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