Stock Analysis & Ideas

Tesla (TSLA): The Battle of the EV Trucks Begins

On Monday, Tesla (TSLA) celebrated 10 years as a publicly traded company. The previous decade has provided enough reasons for a celebration, not least is the EV pioneer’s position as the most successful auto stock since its debu. Shares have skyrocketed more than 4,000% since going public.

Tesla has showed no signs of slowing down, either. It crept back over the $1,000 per share mark again on its 10-year anniversary, following Elon Musk’s suggestion that a second quarter loss wasn’t inevitable, after all.

This remains to be seen when Tesla reports its Q2 vehicle deliveries this week. What has already been proved beyond doubt is Tesla’s ability to prove the naysayers wrong time and again.

The EV pioneer is battle hardened by now, but according to Wedbush analyst Daniel Ives, another battle is about to commence.

EV truck upstart and rival Nikola (NKLA) announced it had started taking reservations for its EV pick-up truck – the Nikola Badger – expected to hit the road in 2022. Ives argues the Badger “clearly goes after the EV leader Tesla with its Cybertruck design.”

The 5-star analyst believes there is strong demand for Nikola’s new offering; the new player has built a “formidable list of preorder customers.”

However, the Badger will go up against the Cybertruck, for which Ives estimates there is already a “staggering” amount of pre-orders “north of 650,000 with momentum building for this latest Musk brainchild.”

Whether there’s room for both in the pickup market remains to be seen. Preorder activity for the Badger over the next few months will make it easier to gauge the impact that the new trucks can have on a market dominated by Ford and GM, with roughly 3 million pickup trucks sold every year in the US.

Ives argues Tesla’s pick-up truck will have a role to play if his long-term forecasts are to be met.

“Ultimately for Tesla’s stock to hit our $1,500 bull case, one key component will be future success on the pick-up market, Model Y, as well as new versions/models to supplement the growth of its linchpin Model 3 design globally,” Ives summarized.

To this end, Ives reiterated a Neutral rating on Tesla shares along with a $1,000 price target. This target suggests 11% downside potential from current levels. (To watch Ives’ track record, click here)

It appears the Wedbush analyst is in sync with the rest of the Street. TSLA’s Hold consensus rating is based on 7 Buy ratings, 10 Holds and 9 Sells. The bears are in the driver’s seat, as the $755.10 price target represents downside of nearly 33% over the next 12 months. (See Tesla stock analysis on TipRanks)

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