Will Tesla’s Cybertruck define its future?
Tesla’s (TSLA) Cybertruck is divisive.
The electric truck received nearly 2 million preorders before its 2019 release, but the hype has cooled off in some corners of the market. That’s partly due to its higher-than-expected price tag, recalls leading to safety concerns, and its design.
“It’s got a really ugly look. Ugly is interesting.”
That’s how Shark Tank investor and entrepreneur Kevin O’Leary described the car to Yahoo Finance in May 2023. O’Leary has invested in companies providing the technology behind the truck.
As of mid-June, Tesla was producing 1,300 Cybertrucks per week, with a goal of reaching 2,500 weekly vehicles by the end of 2024. With a price tag reaching almost $100,000 for the top-of-the-line model — the Cyberbeast — the truck is more expensive than the roughly $50,000 price investors were anticipating.
Will the Cybertruck become Tesla’s next big hit, as pervasive as the Model 3, or will it be a miss for the EV company? Here are a few things to consider when evaluating the potential impact of the Cybertruck on Tesla’s financial future.
Bulletproof. Stainless steel skin. A steering wheel that feels electric. These are all features that are unique to the Cybertruck, the first vehicle in the US to use a full steer-by-wire system.
Steer-by-wire differs from typical pickup trucks in that it uses electronics to steer rather than having a steering rack that connects the wheel with the tires. It’s considered to be a more energy-efficient system.
While the bulletproof exoskeleton of the car is a draw for some consumers, for others, it’s a nonstarter.
“The Cybertruck is way out there … harkening to this sort of Blade Runner-esque, dystopian sort of looking, kind of hard edges stainless steel,” according to Pras Subramanian, Yahoo Finance’s senior automotive reporter.
The car’s aesthetic could be here to stay. Walter Isaacson, who wrote a biography of Musk, has seen preliminary sketches of the much-anticipated (and delayed) robotaxi and said it looks like the Cybertruck.
In terms of demand, the Cybertruck could be a key differentiator in an increasingly competitive EV market.
Tesla’s share of US EV sales fell below 50% for the first time ever in the second quarter. At the same time, the Cybertruck was the highest-selling EV pickup truck in the US in the month of May, according to S&P Global.
While Tesla hasn’t revealed how much it costs to build the Cybertruck, the vehicle was first built at the company’s new Texas Gigafactory, which Musk said was a $10 billion investment.
And the process of building the truck is not easy. The unique exoskeleton is formed using a technique called air bending, which uses high air pressure to shape the stainless steel.
Tesla’s goal is to get the price tag near $50,000, but these manufacturing costs could make that difficult to achieve.
What’s the verdict? Despite mixed reviews, loyal Tesla fans may continue to support Musk’s product visions — and Tesla’s stock price.
Tesla’s short sellers have lost over $60 billion since the company went public, according to Ihor Dusaniwsky, managing director at S3 Partners.
Ultimately, company fundamentals, such as sales numbers for the Cybertruck, are not always what drives Tesla’s stock performance.
“Really, it’s what the market is doing rather than exactly what Tesla is doing,” Dusaniwsky said.
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance
Source link
