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Can the Tesla Cybertruck Push TSLA Stock to New Highs?

Like many, I initially scoffed at the Tesla Cybertruck design. But given the early interest, it could be the thing to put TSLA stock over the top.

Last month’s reveal of the Tesla Cybertruck - all-electric, of course - was a shocker. Elon Musk had warned that the design would be edgy, in the Mad Max/DeLorean mode, but nobody expected this!

The Tesla Cybertruck, in all its glory.

When I first saw the design, I was stunned. But the more I thought about it, the more it made sense.

After all, if you don’t have an engine up front, why do you need a big un-aerodynamic box up front? Why not have a wedge, which slices through air smoothly?


And if you really want to make a tough truck, why not have the structural elements on the outside, where they can do double duty? And while you’re at it, why not use stainless steel, just like John DeLorean did?

Lastly, if you really want to continue being a leader, as Tesla (TSLA) has been since the start, why not throw down the gauntlet and offer a design that truly looks to the future instead of the past?

State of the Competition

One of my pet peeves these days is that everyone seems to be driving a mid-sized gray SUV—and there’s very little to distinguish them from each other. And this is not a problem confined to the U.S. In fact, it’s a problem that’s global, precisely because the auto industry is global.

For example, I recently spent a week in the south of France driving a rented Renault Kadjar, a global car that is sold in both Europe and China.

Here’s my photo of the car. I always take a picture of what I’m driving, mainly so I can find it in a parking lot if I forget what I’m driving.


And here’s an official photo, taken from what someone thought was the most flattering angle.


Inside, the Kadjar did what I wanted; it holds four adults plus luggage quite well.

But for looks, I give it an F. It occupies the same “space” as most other SUVs on the market, but its only slightly distinguishing characteristics are the various bulges—which make it look like a lump of clay someone is still working on. I don’t see any beauty there.

Even worse was the Kadjar’s performance, from a tiny little 1.2 liter (73 cu. in) diesel that was obviously prioritizing economy over performance. The official specs say the 0-100 km/h (0-62 mph) time is 10.1 seconds—but with four adults in the car it was worse.

And speaking of diesel, did you see the news on Audi last month? I used to drive Audis before I got my Tesla; Audi makes good-looking cars. But Audi is in trouble now. Sure, Dieselgate is now in the rear view mirror, and we can hope that parent company Volkswagen will never cheat on emissions tests again, but the fact is the industry is slowing—so Audi is cutting 9,500 existing jobs (roughly 15% of its German workforce) while adding 2,000 jobs for its electric car effort—where it’s obviously behind the curve. Don’t be surprised if Mercedes and BMW follow suit.

Tesla’s Strengths

The bottom line is that electric batteries are now a better source of energy for automobiles, and most of the automotive world now accepts that fact—and is working to catch up to Tesla, technologically.

Ford’s new Mustang Mach-E SUV, for example, unveiled two weeks ago, is a good effort. Targeting the performance crowd, it promises 0-60 mph acceleration times in the mid 3-second range, and a target EPA driving range of 300 miles—numbers that are very competitive with Tesla. The first cars will roll off the line in about a year.


Meanwhile, Tesla is selling all the cars it can make—without advertising, and without dealers—and it has already received up to 200,000 “pre-orders” for the Cybertruck, from enthusiasts who want to be seen as leaders. Interestingly, at $100 a pop, that’s like a free “loan” of $20 million to Tesla.

Of course, these trendsetters will have to wait at least two years before Tesla starts producing the Cybertruck, but when they do they’ll get a truck with crazy amounts of torque, as well as the ability to hit 60 mph in 6.5 seconds (base level) and as little as 2.9 seconds in the “tri-motor” version.

Cybertruck Impact on TSLA Stock?

And what about Tesla stock? TSLA was a rocket way back in 2013, when the world discovered how great the Model S was; the stock more than quadrupled that year! But in the six years since then it’s lagged the market, up “only” 83%.

Could TSLA stock get a boost from the Cybertruck?

Is it possible the Cybertruck will kick off a big surge higher? Yes, it’s possible, and I recommend keeping a close eye on the stock as the New Year rolls around. But first the stock needs to get through resistance in the 390 area, which capped progress in both 2017 and 2018. That’s the number you should keep an eye on today.


Timothy Lutts is Chairman Emeritus of Cabot Wealth Network, leading a dedicated team of professionals who serve individual investors with high-quality investment advice based on time-tested Cabot systems.