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Kml invst
Mar 10, 2023 7:35AM ET
Why? MS: we don't know.
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The Tesla Cybertruck is likely to be a 'cult car' with limited volume says Morgan Stanley
Published Mar 09, 2023 07:34AM ET
Updated Mar 09, 2023 07:45AM ET
© Reuters. The Tesla (TSLA) Cybertruck is likely to be a 'cult car' with limited volume says Morgan Stanley
By Michael Elkins
Morgan Stanley reiterated an Overweight rating and $220.00 price target on Tesla (NASDAQ:TSLA). After speaking with clients, analysts feel there may be some room to manage expectations about the significance of the Cybertruck.
There are some who believe that Tesla may sell many hundreds of thousands of Cybertrucks annually. However, analysts think it will more likely be an enthusiast/cult car with far more limited volume. Somewhere closer to 50k units/year.
“The Cybertruck is an important element of Tesla’s futurist brand image,” write analysts. “One of the most interesting features of the truck is the lack of a Tesla emblem anywhere on its exterior. The truck itself is emblematic of the company and the risks it is willing to take to push the envelope and reinvent so many aspects of what it means to be an auto manufacturer. We feel the Cybertruck carries more value in a cultural/zeitgeist sense than in a direct economic sense. At the same time, we encourage our readers to ask themselves: how many Cybertrucks can roll up to a parent-teacher conference or youth soccer match at the same time before losing some of that indescribable… something?”
In November of 2019, when Tesla first unveiled the Cybertruck, the company’s share price was around $22 with a market cap of just under $65 billion. At the time, Tesla was just beginning to post positive GAAP profit and was still ramping up its Shanghai plant.
“A lot has changed since Franz von Holzhausen threw a metal ball at the ‘Armor Glass’ window of the Cybertruck in November 2019,” write analysts. “The truck is real and we had a great time with it last week behind the Austin plant. But financially it may be more of a ‘side-show’ to the Tesla story today.”
Morgan Stanley still thinks the Cybertruck is an important product for Tesla in many ways. At the same time, they think investors can consider that Tesla’s mission, and the expectations embedded in its $650B market cap, has expanded exponentially since 2019.
Shares of TSLA are down 3.08% in pre-market trading on Thursday.
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Comments (6)
Den Mor
Mar 10, 2023 12:04AM ET
The Ford Edsel, the Pontiac, Aztec, and now the cyber truck. That’s how history will rate these vehicles as complete failures.
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Tom Forstreuter
Mar 09, 2023 12:51PM ET
And Morgan Stanley has been right how many times? Not!
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Benjamin USA
Mar 09, 2023 12:51PM ET
Thanks for sharing Tom!!
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Chong H Loh
Mar 09, 2023 9:47AM ET
I think it will still be a hit... Certain things you hv to own it to know it. It's paving way for newer designs and tesla is pushing the envelop more than anyone.. We also use to think that a phone just hv buttons to be calls a phone.. Now I want to ask, when's your last time u touch a button to dial?
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upORdownWEgo
Mar 09, 2023 9:47AM ET
For sure, just watch and learn you naysayers....
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Mark Swiatek
Mar 09, 2023 8:17AM ET
They should cancel it. Nobody will buy it. It just isn’t practical.
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Brad Albright
Mar 09, 2023 7:49AM ET
Like the Delorean, but without the cool factor.
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