Last week on Nov 21, Tesla (NASDAQ:TSLA) unveiled Cybertruck, a pickup truck at a competitive price. The unusually simplistic design may prove a headwind for sales. Tesla stock fell from $360 to $333.45 following the announcement. Is this a reaction to the Cybertruck’s lack of a refined look?
Profit-taking on the buy on rumor, sell on fact may explain the initial drop in Tesla stock following the Cybertruck launch. Yet few may ignore the ugliness of the truck. Starting at just $50,000, the truck may not have incurred much development costs. Production costs are equally low because of a lack of curves and complex design.
The Tesla EV truck costs less than the Rivian’s $69,000 starting price. This may not say much if the base model Cybertruck is not even available. When Tesla previously advertised Model 3 at around $40,000, it was not available at the time of launch, either.
Bears Losing Fight
Tesla stock bottomed in June at $180. Strong quarterly results lifted the stock, taking away the trading profit from among investors holding a 22% short float. Conversely, Nio Inc. (NYSE:NIO) is not faring well on the markets. Nio’s sales are weak. This may indirectly help Tesla in China. So long as Nio struggles to sell, Tesla has a low-cost production advantage and could grow sales in the region.
