Here Is Why A Bullish Tesla Analyst Says Cybertruck Will Likely Be Delayed
Piper Sandler analyst Alexander Potter recently hosted “Electric Truck Day”, in the event analysts from Piper Sandler had the chance to chat with 11 different management teams working in the electric truck space.
Based on the event, Piper Sadler has divided players in the electric truck space into 3. One is battery and drivetrain specialist. Two, no-frills light/medium duty vehicle makers. And three, new vehicle brands targeting high volume segments.
In the short term, Alexander Potter believes companies from category 2, meaning ones going for more niche markets and ones not trying to develop their in-house battery and powertrain capabilities will be the most likely to generate revenue.
However, in the long term, the true winners will come from the first and third categories. And Piper Sandler believes Tesla combines the expertise of battery and powertrain and also as one targeting high volume segments.
Potter considers high-volume segments to be the class 8 truck market and the pickup truck market. And Piper Sandler believes Tesla with the Semi and Cybertruck is the company most likely to succeed.
Piper Sandler puts competitors to Tesla in two categories. First is established companies with a long history of making class 8 and pickup trucks. Few names from this category that are developing electrified versions of their vehicles include Ford, Freightliner, Volvo, and PACCAR.
However, the companies mentioned won’t be the only competition Tesla will face. Other names looking to play in the electric truck space include new entrants such as Xos, Rivian, Arrival, and Nikola. Still, Piper Sandler believes Tesla is the most likely to succeed. As a result, the company has an overweight $1,200 price target for the stock. Tesla stock closed at $630 on Wednesday.
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So if Piper Sandler is so bullish on Tesla why does the firm believe Cybertruck’s delay is likely. The firm’s note, Alex Potter writes “Tesla remains one of our highest-conviction long ideas, but even better entry points could lie ahead. Temporary sell-offs seem likely because, over the next 6+ months, there is a high degree of unpredictability in Tesla’s production ramp.
Continuing Potter writes “This is particularly true for the company’s new plants in Germany and Texas, the latter of which will be producing both battery-and truck-related products using novel manufacturing techniques.”
The Cybertruck will be the first mass-market vehicle with an exoskeleton chassis and stainless steel body. This on its own is a radical departure from tried and true manufacturing techniques. As a result, just this part of the manufacturing process could be a huge risk to the production start date.
Pretty pretty please Elon? Is white oxide a thing? pic.twitter.com/BG1rwjnQ9x
— Sicily (@Ghost_TeslaPhx) July 21, 2020
— Elon Musk (@elonmusk) July 26, 2020
However, this is just the beginning Tesla is bringing multiple first of a kind with the Cybertruck. For one, Tesla in order to produce the bed of the Cybertruck has commissioned the world’s largest Giga Press at 8,000 tons of force. In addition, the Cybertruck will use an in-house Tesla-created first-of-its-kind stainless steel alloy.
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Added to this, the Cybertuck will also incorporate several breakthroughs announced at Tesla’s Battery Day event. These are the new 4680 cells with the tabless design, nickel cathode, and silicon anode. Plus the Cybertruck will also have a structural battery pack design.
And if all these new untested production techniques weren’t enough of a risk to cause a delay. Tesla, before the company can start producing the Cybertruck, also has to first build and tool the Texas gigafactory. And the Cybertruck will also follow Model Y which will be the first vehicle that will be produced at Giga Texas.
Musk also seems to be aware of all the hurdles Tesla has to cross if the company is going to deliver the Cybertruck before the end of 2021. Speaking in his latest appearance on the Joe Rogan podcast Musk said “if we are lucky we will deliver the Cybertruck by the end of this year.”
So what do you think? What are the chances Tesla can start Cybertruck production before the end of this year? Also, do you think if the Cybertruck is delayed Tesla’s share price will fall? Let me know your thoughts down in the comments below.
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Tinsae Aregay has been following Tesla and The evolution of the EV space on a daily basis for several years. He covers everything about Tesla from the cars to Elon Musk, the energy business, and autonomy. Follow Tinsae on Twitter at @TinsaeAregay for daily Tesla news.