Tesla is tumbling.
Shares of the electric automaker were down more than 6% in Friday trade following the reveal of Tesla's new pickup Cybertruck, which was met with mixed reactions on Wall Street as some balked at its unusual design. A botched demonstration of the truck's "bulletproof" windows added to the skepticism.
The event, led by Tesla CEO Elon Musk, also introduced a new all-terrain vehicle, or ATV, meant to roll into the back of the Cybertruck.
Here's what experts, including Jim Cramer, are saying about the Cybertruck:
Cramer, the host of CNBC's "Mad Money," worried the electric pickup would be dead on arrival:
"Since Musk announced it, the stock is up 37 [basis] points from [$]317. The Cybertruck to me seems stillborn. When you look at it ... look, there's no accounting for taste. Maybe some people will like the look of it. But I think what's really important — and [CNBC's] Phil LeBeau went over this — it's just not going to dent the Ford, GM, Chrysler Dodge hammerlock on the best part of the entire market. I just think it's going to be a bit of a bust. I'm calling it the [Ford] Edsel. The E-Edsel. That's my name for it. ... I look at this thing, and I do think that there is a DeLorean aspect to it. That was a niche product. I think that the trick to trucks is that they all look like each other. That's what people want, and this does not look like anything."
Craig Irwin, senior research analyst at Roth Capital Partners, said this was more of a sustainability play on the automaker's part:
"The best part of the demonstration, actually, was the ATV. I think that could crush everything in units. I mean, that's a cool little toy. So, last night was really just Elon having some fun. He's said in public before that he doesn't really expect the truck to be a main-line product. … Tesla needs to do whatever they can to keep the multiple in the stock, and part of that is driving enthusiasm for the rest of the vehicles and enthusiasm for the company, and retail investors are a large part of the trading dynamic in Tesla. So, this is something they're doing to maintain their multiple."
Steve Westly, a former Tesla board member and the founder and managing partner of The Westly Group, said the pickup truck's $39,500 price tag "is still a high price for the American consumer":
"But the fact is the cost of lithium ion batteries is going down. I think you're going to see Tesla bringing the price down over time. But, look, it's hard to complain about this. Tesla is now the No. 1 selling vehicle in the Netherlands, in Norway, in Switzerland, No. 3 in the U.K. Whatever else you might say about Elon, they've been extremely successful at going international and showing there's a larger market than people had previously thought, and then this month, literally, they are beginning to deliver their first cars off the assembly line in China. So, they're doing an awful lot, right, including getting to profitability sooner than people thought. The big question now is how soon can they get this new Tesla Cybertruck to market? Historically, they've been a little late to market, but they've really improved their manufacturing game and, as analysts have noted, the Model Y, they just moved up the entry date by three months. They know this is a tough race. They want to beat the others to market. The only other thing I'd say about the design is it is a little edgy, but what Ford and GM have been doing [is] making ultra-conservative, traditional vehicles. I think the market's ready for something newer."
Loup Ventures Managing Partner Gene Munster said this was still a notable development for Tesla:
"In terms of the pickup, ... we think this is probably going to account for 5% of their total sales in 2023. It's going to ship end of 2021, ramp production in 2022. Globally, pickups are 6% of sales. In the U.S., they're 18%. I think that the type of design – it's called brutalist, is the technical term; the novice term is Tron-like – I think that will appeal to a segment, a small sub-segment, of the pickup market and, separately, of the SUV market. So, it will capture a couple segments. … This is 5%. It's not a huge needle-mover, but it is important that this is incremental to their business. They're not cannibalizing any products here, and I think that this is another step in the company reaching escape velocity and ultimately being a much larger company than the $60 billion market cap today."
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