Gary Black Dismisses FSD Hype Behind Tesla’s Rally, Says Rising Oil Prices Have Boosted Q2 Delivery Expectations

• Tesla’s vehicle registrations, a key indicator of sales, increased across several European markets in June.
• Tesla’s deliveries are likely to increase in the second quarter due to strong demand in Europe.
• On Tuesday, Michael Burry said he opened a short position on Tesla at $416.22.

Gary Black, managing director of The Future Fund, said that Tesla’s (TSLA) recent rally is driven more by expectations for stronger EV sales than by renewed enthusiasm for its Full Self-Driving (FSD) technology or AI.

“Tesla and Rivian both rising into second-quarter deliveries tomorrow, throwing cold water on the idea that TSLA’s rise has to do with sudden excitement about FSD or AI,” Black said in a post on X on Wednesday.

TSLA shares were up 2% at the time of writing and are on track to close in the green for a fourth straight session.

Increase In Deliveries Likely Due To Surging Oil Price

On Tuesday, Black said he expects Tesla to deliver about 410,000 vehicles in the second quarter, which would be a 7% increase from a year earlier and also above Wall Street’s consensus estimate of 406,000 units.

However, he said the expected increase in deliveries, likely fueled by surging oil prices over the past quarter, as the main reason for the stock’s rally. He also highlighted a similar setup for Tesla’s rival Rivian.

“With 72% of TSLA profits and 100% of RIVN profits driven by sales of EVs, the likely delivery surprises tomorrow fueled by surging oil prices over the past quarter is clearly the reason for renewed optimism in both EV makers,” Black added.

On Tuesday, investor Michael Burry, profiled by author Michael Lewis in his book ‘The Big Short,’ said he opened a short position on Tesla at $416.22 and was “happy it jumped back to this level.”

TSLA Registrations Surge Across Europe

Tesla’s vehicle registrations, a key indicator of sales, increased across several European markets in June. Registrations rose 39% in Denmark, 56% in Sweden, 5.6% in Spain, and more than doubled in France, according to local industry data.

According to a Reuters report on Wednesday, Tesla is expected to report a 5% increase in Q2 vehicle deliveries on Thursday, driven largely by stronger demand in Europe.

Retail Mixed After TSLA Rally

Retail sentiment surrounding Tesla on Stocktwits turned ‘bullish’ from ‘neutral’ a day earlier, amid ‘high’ message volumes.

One user called the stock “too overbought,” adding that a healthy pullback to $424 or lower is required.

Another user expects the stock to climb to $440 if it breaks the $433 resistance.

Shares of the EV maker have declined by around 2% so far this year.

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