Will Tesla Inc.'s New Semi Truck Propel The Company's Stock Even Higher?
Analysts covering Tesla Inc. (NASDAQ:TSLA) appear to be very mixed in their views of the EV maker following the company's landmark announcement it intends to enter the trucking industry. From a vision spurred by CEO Elon Musk to eradicate the diesel engine, moving into this sector makes complete sense strategically; in many ways, Tesla has paved the way in EV innovation, making EV cars a reality when many pundits had written off this movement as simply a passing fad. The move into the trucking industry, buoyed by a promise by J.B. Hunt
Transport Services Inc. to test Tesla's trucks on its largest business segments, has seemingly given life to the idea that EV trucks are not too far from becoming reality.
The details of what Tesla's new truck can do is perhaps what has made some of the bullish analysts covering Tesla even more giddy. Among the features listed by Tesla during the company's unveiling, a 500-mile (800-kilometre) range for the truck blew past analyst expectations.
Combining the truck's specifications with initial interest, one can see the temptation to increase expectations for continued share price appreciation in the quarters and years to come.
That said, the bearish case on Tesla holds significant water, given the company's massive cash burn rate and the lack of cash reserves to get the company through 2018. An additional capital raise is likely on the horizon, and investors will need to decide whether the positive aspects of the company's truck unveiling outweighs the fact that this new potential production headache will result in Tesla needing to raise more money than ever.
Invest wisely, my friends.