It is official. CEO Elon Musk tweeted that Tesla (TSLA) the company will unveil a Semi truck in September. The post earned over 15,000 retweets and over 49,000 ‘likes’ on Twitter.
In between the truck launch, Tesla will launch Model 3. So while targeting the mainstream market, the upcoming truck may have a long-range battery powered by fuel cells. Since trucks are primarily geared toward long-distance delivery, Tesla’s product should at least meet that need.
Musk’s announcement is very ambitious. Truck demand is sensitive to the economic cycles. Any sudden change in the market conditions could set back Tesla’s quarterly revenue. Its core products, the Tesla S and X, need the company’s full attention. Though sales are meeting shareholder expectations, Tesla must have a roadmap for ensuring their future releases will find strong demand.
The Tesla truck is still a significant milestone for the company. It will set new battery durability and performance standards for the fuel cell industry. For shareholders, though, changes are good that the R&D spend, development, and launch of the new product will hurt cash flow this year. Tesla still has the liquidity to raise debt or sell stock to pay for the Truck launch. Risks are higher for holding Tesla stock. As long as Musk delivers on his promises, shareholders will remain happy.
