The Day After: Market, Analysts React to L.A.-area Explosion (of Disbelief)

Steph Willems
by Steph Willems
the day after market analysts react to l a area explosion of disbelief

Given what Tesla revealed last night, it seemed appropriate to reference a movie from the early ’80s — an era from which the automaker’s “futuristic” Cybertruck appears to have emerged. Looking like a stainless steel pup tent with a delicatessen counter serving as a dash, the Cybertruck’s Thursday night reveal generated a critical mass of hot takes, resulting in an megaton-level explosion of ridicule heard to the farthest reaches of space.

Perhaps even on Mars.

While the term “half baked” appeared to be one of the more popular descriptors for the vehicle (and may be a contributing factor to the vehicle’s design), market analysts are a sober-minded crowd. Friday morning, they let loose.

CNBC has a good rundown of Wall Street’s reaction.

“In a night to be remembered for the Armored Glass fail, Tesla’s Cybertruck reveal will likely disappoint current pickup truck owners and we see the vehicle remaining a niche and not a mainstream product,” wrote Jeffrey Osborne in a note to investors, adding that the entry-level $39,900 version was, like the much-touted $35k Model 3, unlikely to ever see the light of day. The vehicle’s glaring lack of side mirrors and windshield wipers is evidence of a rushed launch, he said.

No mention was made of the tacky seam (weld?) at the apex of the Cybertruck’s triangle.

Emmanuel Rosner of Deutsche Bank wondered whether the pyramid-shaped vehicle was too polarizing, writing “what are the real battery ranges under working conditions, with a payload or while towing? A greatly reduced range would require commercial customers to opt for the higher trims, which could be significantly more expensive than their equivalent traditional pickups.”

He added that having the truck’s supposedly armoured window glass shatter during the reveal was “not a good start.”

Like many others, Bernstein analyst Toni Sacconaghi saw the makings of a niche vehicle in Cybertruck, rather than a serious challenger to high-volume offerings like the Ford F-150 and Ram 1500.

“We suspect Cybertruck will not materially impact Tesla’s financials, or investor sentiment, though its aggressive price raises the question of how healthy gross margins might be,” Sacconaghi wrote.

After gazing at the creation before him, Credit Suisse’s Dan Levy claimed the Model 3 and Model Y will be the company’s breadwinners for the foreseeable future. “We expect Cybertruck to be a lifestyle vehicle; but amid a highly radical design (unlike anything the industry has seen), it’s unclear to us who the core buyer will be,” he wrote.

Jed Dorsheimer of Canaccord Genuity was more bullish on the Cybertruck, claiming the introduction gives Tesla a presence in a segment previously reserved for other players. “The starting price point of $39,900 for the 250-mile-range, single-motor RWD design option was also a strong point as this positions the Cybertruck competitively in the middle of the lucrative truck market,” he wrote. Still, Dorsheimer admitted the design was “polarizing.”

There’s nothing wrong with wild, polarizing styling, as such things keep the world a vibrant and exciting place. But Tesla’s creation inspired more questions than answers. Where will it be built? How is this model going to get off the ground a year after the Model Y, a vehicle whose production is also peppered with questions of capacity? Is rear-seat headroom all that hot? Can the design stay as-is in a world that demands stringent pedestrian safety standards?

We await the answers.

Tesla’s stock sank 5.7 percent in early Friday trading.

Tesla Truck is gonna have traditional F150 buyers FLOCKING… to Ford dealerships. Every single car vlogger is gonna buy one though.

Still not going to believe the design till I see one on the road.

— EngineeringExplained (@jasonfenske13) November 22, 2019

[Images: Tesla]

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2 of 108 comments
  • JaySeis JaySeis on Nov 24, 2019

    Well, the future was essentially “designed” over a half-century ago so EM’s going to have a problem designing anything that shocks us and is functionally useable. Tesla’s current vehicles aren’t striking visual standouts, if anything they’re just plain. Calling a bent pyramid a “truck” doesn’t make it a truck. However.. I’m amazed how much debt people will spend on statement vehicles and tech-bros are no different. If EM called a flat sheet, a cube, a cylinder, a ball, or a Rubik’s cube... of stainless, a truck, techbros will buy it.

  • Jeff S Jeff S on Nov 24, 2019

    If one is old enough then one only needs to remember the pet rock and the mood ring. Possibly this is just a more expensive fad but possibly I am wrong and this will be the truck that paves the way for all future EV trucks. I am skeptical. Wedge shapes are not exactly a new vehicle design. The Triumph TR7 was wedge shaped just not as extreme as this Tesla truck.

  • 3SpeedAutomatic And this too shall pass.....Ford went thru this when the model T was introduced. It took the moving assembly line to make real money. As time progressed, it got refined, eventually moving to the Model A. Same kind of hiccups with fuel injection, 4 speed automatic, Firestone tires, dashboards with no radio knobs, etc, etc, etc. Same thing with EVs. Yep, a fire or two in the parking lot, espresso time at the charging stations, other issues yet to be encountered, just give it time. 🚗🚗🚗
  • Art Vandelay 2025 Camaro and Challenger
  • Mike Beranek Any car whose engine makes less than 300 ft-lbs of torque.
  • Malcolm Mini temporarily halted manual transmission production but brought it back as it was a surprisingly good seller. The downside is that they should have made awd standard with the manual instead of nixing it. Ford said recently that 4dr were 7% manual take rate and I think the two door was 15%.
  • Master Baiter It’s hard to make predictions, especially about the future. It will be interesting to see if demand for Ford’s EVs will match the production capacity they are putting on line.