- TSLA stock sinks three days in a row despite Cybertruck unveiling.
- Analysts conclude that Cybertruck will find it difficult to turn a profit.
- TSLA stock is the midst of forming a bearish Three Black Crows pattern on the daily chart.
- Fed Chair Powell gave a hawkish speech at Spelman College, saying interest rate cuts were not yet on agenda.
Tesla (TSLA) stock closed down 0.55% to $238.75 on Friday, marking a three-day consecutive drop. It seems like a bearish Three Black Crows candlestick pattern is emerging, suggesting TSLA stock may decline about 10% to the $210 support level or even further to the descending bottom line of the price channel in the $180s as the market moves toward Christmas.
Tesla’s Cybertruck unveiling impressed analysts but failed to make a significant impact on the market this week. In addition, Federal Reserve (Fed) Chair Jerome Powell put a damper on the possibility of a central bank interest rate cut.
“It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance or to speculate on when policy might ease,” Powell said in a speech at Spelman College on Friday morning. “We are prepared to tighten policy further if it becomes appropriate to do so.”
While the Tesla Cybertruck has made a distinctive impression among its competitors, it is projected to have a limited impact on Tesla’s financial performance. CEO Elon Musk acknowledged the challenge of making the model cash-flow positive. Only 10 units were delivered at the event.
Analysts share similar conclusions but remain optimistic about the potential for Tesla to expand its portfolio. Morgan Stanley’s Adam Jonas sees the Cybertruck as Tesla’s first step in building more mainstream trucks and SUVs in the latter part of the decade. The Cybertruck is predicted to remain a niche product.
“By 2025, we forecast the Cybertruck will account for less than 5% of Tesla’s revenues and closer to 0% of profit,” Jonas wrote in a client note.
Despite its science-fiction design, the Cybertruck boasts competitive features, including 2,500 lbs. of towing capacity. In a head-to-head matchup with other trucks, the Cybertruck came out on top, according to Tesla.
The lowest-priced model of the Cybertruck comes in at $61,000 before tax breaks and has a battery range of 340 miles. Tesla claims to have retained 2.1 million reservations for the Cybertruck, which is quite robust.
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What are electric vehicles?
Electric vehicles or EVs are automobiles that use rechargeable batteries and electric motors to accelerate rather than internal combustion engines (ICEs).