Claudia Assis never saw good news come from Tesla that she didn’t interpret as bad news. This week with Tesla’s much anticipated Cybertruck debuting tomorrow, she made the rounds of Tesla critics and short sellers to find out why this was a bad thing.
Some on Wall Street were sounding skeptical about the new Tesla Inc. pickup truck, the Silicon Valley car maker’s first foray into the top auto segment in the U.S.
“We expect focus to be on how well the actual design resonates with pickup buyers,” Emmanuel Rosner at Deutsche Bank said in a note Monday.
There’s a risk the vehicle would be so futuristic as to not attract “traditional pickup buyers, leaving it a lower-volume niche product,” Rosner said.
Yes, that would be a worry if Tesla was trying to sell to “traditional pickup buyers”, who would not drive a Tesla if it came free with a case of Pabst Blue Ribbon. Tesla’s customer base are people who want a pickup truck that isn’t coating the insides of their lungs (and their children’s lungs) in a way that would make a bare-handed coal miner leery. Oh, and contractors who don’t want to pay 25¢ a mile to haul around their tools, including a generator to power said tools, when they can pay under a dime a mile and power their tools with their truck.
Back in March, Tesla revealed the compact SUV Model Y just ahead of its first-quarter results. Many analysts faulted Tesla for that timing, and the reveal renewed concerns about production issues. The stock fell 5% after the Model Y unveiling.
True. The stock fell to around $280. Of course this week it is trading at $350+, so I don’t think the “concerns” were lastingly concerning.
“After the model Model Y launch fizzled on concerns this will cannibalize the Model 3, we expect a similar response to the truck,” said Craig Irwin, an analyst with Roth Capital Partners.
In 24 hours after the reveal of the Model Y, 5 million people had watched the livestream on Youtube. Contrast this with the 50,000 who watched Ford’s Mustang Mach E reveal. We seem to have a different idea of “fizzled”.
Roth Capital can’t seem to make up its mind what it believes. They rated Tesla a buy at $208 this past June, but then rated it a sell October 29th, with a target rating of $249. Tesla closed that day at $323, and as I write this is trading at $353.
“We do not expect initial truck production until mid-2021, around a year after first Model Y production,” Irwin said in a note. Tesla could also walk back from prior suggestions that the “cybertruck” would start at less than $50,000 and with the 400-500-mile range, he said.
Tesla “could” do that. They also “could” build robotic fire ants and send them to Mars, then bury fickle analysts in the mounds covered Karo Syrup. I don’t expect that idea to begin production until mid-2021.