What to expect from Tesla's Cybertruck launch

By Claudia Assis

Tesla plans to mark first sales with event in Texas

The long-awaited Tesla Inc. Cybertruck is scheduled to go on sale on Thursday after years of delays and as Chief Executive Elon Musk warned there would be "challenges" to reaching volume production of the electric pickup truck.

Tesla (TSLA) is holding an event Thursday at 3 p.m. Eastern at its factory in Austin, Texas, to mark the occasion and deliver the first Cybertrucks to 10 customers.

On Monday, the Cybertruck account on X, formerly Twitter, played with the Cyber Monday moniker for post-Thanksgiving electronics sales by declaring it to be Cyber Thursday this year:

Tesla stores across the U.S. have displayed Cybertrucks over the weekend, drawing crowds, and the trucks "seem to be creating a buzz as the company aims for a 'halo effect' to be created by the vehicle," Deutsche Bank analyst Emmanuel Rosner said in a note Tuesday.

Tesla shares rose nearly 3% on Tuesday, looking poised to notch a third straight day of gains and up nearly 21% so far for November. That compares with gains of about 9% for the S&P 500 index SPX in the same period.

Tom Narayan at RBC Capital Markets also spoke about a "halo effect" from the Cybertruck sales.

The start of Cybertruck sales could help "to reinvigorate the brand," and by extension help Tesla to sell more Model 3 small sedans and Model Y compact SUVs and support the stock, the analyst said.

See also: A hybrid just won 'vehicle of the year.' Here's why the EV case has been hard to crack.

The Cybertruck has drawn more than 1 million reservations since its unveiling in November 2019, when to the delight of meme makers the world over, a test of its "armor glass" went awry when two windows badly cracked after a steel ball was thrown at them.

"We expect conversion rates to be at or below the Model 3 conversion rate, but that is still enough for a few years' worth of demand" at Tesla's planned annual production of about 250,000, Narayan said. He added that the Cybertruck is a "polarizing product" not only in terms of its angular, futuristic design but also "in terms of practicality because it is much larger than the best-selling trucks."

At the 2019 unveiling, Tesla said the truck's starting price would be around $39,900 for single-motor version with a battery range of about 250 miles, all the way up to $69,900 for a tri-motor version with a range of 500 miles.

Given average transaction prices for autos have gone up about 25% to 45% on average since 2019, "we would expect pricing to be higher commensurately," the analyst said.

"We are reminded by the Dodge Viper, which was a low volume model for Chrysler decades ago, that many believe helped to reinvigorate the Chrysler brand," Narayan said.

Dan Ives with Wedbush earlier Tuesday hailed the start of Cybertruck sales as "another historical moment for Tesla."

-Claudia Assis

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11-28-23 1358ET

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