Wallstreetcn
2023.11.27 05:04
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Tesla's Tesla deliveries this week! Market focuses on two major points of interest.

After two years of delay, Tesla is finally going to start deliveries this week! On November 30th, Tesla will hold a delivery event at its Gigafactory in Austin, Texas, and the event will be live-streamed on the Tesla official website. This also means that investors can start looking for answers to two key questions: Will Tesla become a best-selling model?

After being delayed for two years, the Cybertruck will finally start deliveries this week!

On November 30th, Tesla will hold the Cybertruck delivery event at its Gigafactory in Austin, Texas, and the event will be live-streamed on the Tesla website.

This also means that investors can start looking for answers to two key questions:

Will the Cybertruck become a best-selling model? Can it boost the sales of other Tesla models?

Tesla's stock price has surged 117.8% this year, far outperforming the S&P 500's 19.2% and the Nasdaq's 37.2% gains.

Due to production constraints, the Cybertruck may not quickly surpass its competitors

The first question may not be answered quickly.

Due to the immense manufacturing difficulty, Musk previously stated that Tesla has the capability to produce 125,000 Cybertrucks per year, but it won't be until at least 2025 that the production capacity can reach 250,000 units per year.

He also warned that it would take at least 18 months for the Cybertruck to become a "significant positive cash flow contributor."

However, it is worth noting that the current number of Cybertruck reservations has exceeded 1 million, which means that once the production capacity improves, the revenue it brings will be substantial.

How big is the halo effect of the Cybertruck?

As for the second question, some analysts believe that the Cybertruck may be able to boost Tesla's overall sales through the halo effect of the brand.

In the automotive industry, the halo effect refers to how a new and cooler model can boost the sales of other older models, such as Cadillac's recently launched Celestiq electric vehicle (with a starting price of over $300,000).

"This car has a halo factor," said Tony Johnson, Cadillac's marketing director, in a recent interview with the media. "It's important for the Cadillac brand because it proves that we can design world-class ultra-luxury cars."

It is worth noting that Tesla has actually experienced a halo effect before.

The Model Y boosted the sales of the Model 3, with the former being launched in 2020 and the latter in 2017.

When the Model Y was launched, investors were concerned that it would cannibalize the sales of the Model 3, but that turned out not to be the case.

In 2022, the Model 3's sales in the US exceeded those of 2020, and the Model Y's sales also exceeded 250,000 units.In addition, in 2022, Tesla's total sales in the United States increased by 150% compared to 2020, and both Model Y and Model 3 are hot-selling products.

From a global perspective, Wall Street predicts that Tesla will deliver approximately 476,000 vehicles in the fourth quarter of 2023 and approximately 487,000 vehicles in the first quarter of 2024.

As the year-end approaches, the Cybertruck may not have a significant impact on Tesla's overall sales, but considering Wall Street's optimistic sales expectations for Tesla in 2024, investors may see the potential impact of the Cybertruck.

In fact, when the Cybertruck was first launched, investors were not primarily thinking about the halo effect, but rather a profitable niche market.

As of the first three quarters of 2023, Ford, General Motors, Dodge, and Toyota sold approximately 1.6 million full-size pickups in the United States, accounting for about 14% of all light vehicle sales.

Since competitors are enjoying a large share of the pickup truck market, Tesla also wants a piece of the pie.

What about the Model 2?

With the Model 3, Model Y, and Cybertruck, Tesla has already covered more segments of the automotive market, but it still needs a smaller and more affordable electric vehicle to stand out in the fierce competition.

More importantly, American car owners do not have many cheaper electric vehicle options.

According to data from Cox Automotive, the average price of non-luxury cars in the United States is about $44,000, while the average selling price of pure electric vehicles is about $52,000.

Although priced higher, the Model Y is likely to become the best-selling car globally by the end of 2023, not only the best-selling electric vehicle but also the best-selling car overall.

Analysis predicts that Tesla's smaller model (referred to as the Model 2 by the industry) may be launched in 2024 or 2025. According to media reports, Tesla's management has discussed this issue several times in recent months, but the timing, design, and pricing have not been determined.

The pricing of the Cybertruck has not been determined either.

Gary Black, co-founder of Future Fund Active ETF (FFND) and Tesla shareholder, predicts that the single-motor version will be priced at $49,990, the dual-motor version at $59,990, and the tri-motor version at $79,990.

Based on these prices, all three configurations of the Cybertruck are eligible for a $7,500 federal tax credit.