Tesla Shares Fall Following Cybertruck Release
Tesla, Inc. (TSLA) shares have fallen in the two straight sessions that followed the release of its much-awaited Cybertruck, with many pointing to the higher-than-expected pricing as the reason for the decline. The Cybertruck, the newest vehicle from the electric vehicle maker’s stable, has received mixed reviews, with some praising its performance and others criticizing its design.
According to an analyst at sell-side firm Canaccord Genuity, the Cybertruck is as polarizing as company CEO Elon Musk. “It’s hard to argue against its genius and its performance,” said George Gianarikas in a CNBC interview. He highlighted the vehicle’s impressive performance metrics, stating that it beat a Porsche 911 “off the line” while towing another Porsche 911, and its turning radius is “incredible.”
Gianarikas believes that the electric vehicle industry will experience a similar transformation as the mobile phone industry did 10 to 15 years ago when smartphones were introduced. He suggests that companies like Tesla and Rivian, which have built new products from the ground up, will likely emerge as winners in this industry shift. He described Rivian’s product as “incredibly compelling” and praised the company’s design and software capabilities.
However, the economics of the Cybertruck remain uncertain. Gianarikas acknowledged that like any new vehicle, it could lose money at the beginning. Nevertheless, he believes that over time, the Cybertruck will reach profitability similar to other Tesla vehicles due to the existing infrastructure in place at the facility where it is produced.
One of the main criticisms of the Cybertruck is its higher-than-expected pricing. Gene Munster, an analyst at Deepwater Asset Management, suggested that at the current production rate, it could potentially result in a loss of $10,000 per vehicle.
Despite the mixed views and concerns about pricing, Tesla remains a prominent player in the electric vehicle market. The company ended Friday’s session at $238.83, down 0.52%.
As the electric vehicle industry continues to evolve, it will be interesting to see how Tesla’s Cybertruck fares in the market and how it impacts the overall landscape of electric vehicles. Only time will tell if the Cybertruck becomes a game-changer or faces significant challenges in its journey towards profitability.
[Image Source: Benzinga]