Tesla to Unveil First-Ever Electric Truck -- 3 Things Investors Need to Know
Tesla is unveiling its first-ever electric truck Thursday night and while this isn't a super long-term project, investors should be aware the vehicle line won't bear fruit immediately.
The stock was down 1.57% to $353.87 a share Wednesday.
First off, the truck is called the "Cybertruck," and it will be unveiled at an exclusive event in Los Angeles.
Secondly, one of the most important factors here is pricing and competition.
Tesla is known as an innovator, but innovators often give way to competitive new entrants in time.
Rivian, a start-up electric truck maker has already gotten a $700 million investment in a round lead by Amazon.
Rivian, which has caused some concern for Tesla investors, prices its R1T at $69,000.
Tesla is expected to come in at around $50,000.
Some analysts say Tesla will price just a below $50,000.
Tesla certainly isn't coming in at the high-end of the market and the company is fully aware that General Motors and ford also have big plans to make electric vehicles within the next one to two years.
"Gaining market share with stalwarts such as Ford and GM entrenched in this landscape will be a difficult task for Fremont," wrote Wedbush Securities analyst Dan Ives in a note.
Lastly, for the near-term, "Broadly speaking, we do not think consensus estimates incorporate any meaningful contribution from the pickup," wrote Deutsche Bank analyst Emmanuel Rosner in a note.
Rosner added that Tesla will likely see increased capital expenditures as it ramps production of the trucks.
Analysts have yet to model what the new segment could look like, but Tesla investors will have to factor another layer of cap-ex for the near-term before these trucks begin to sell.
For the third quarter, in which Tesla posted a surprise profit on every basis, free cash flow put estimates to shame, coming in at $371 million, beating estimates of $32 million.
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