Tesla Inc (Nasdaq: TSLA) has struggled with production delays in rolling out the Tesla Model 3, but optimistic investors are already turning their attention to Tesla’s next potential ground-breaking product.
At 11 p.m. EST Thursday, Tesla will be hosting an event at which it is expected to unveil a prototype of its fully electric tractor-trailers.
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Tesla investors can watch the event live via a video stream on Tesla’s website, and CEO Elon Musk has said the truck “will blow your mind clear out of your skull and into an alternate dimension.”
Few details are known about the tractor-trailer at this point, but it is expected to have a fully charged range of at least 300 miles and at least some level of self-driving capabilities.
Several Wall Street analysts say the semitrailer will be well-received by investors.
Baird analyst Ben Kallo says the event “should be a positive,” although Model 3 production will remain the primary catalyst for the stock.
“Although the truck is likely 1.5 to two years away from commercial production, the event could provide details about costs, market size, and expected penetration rates, which will allow for longer-term valuation of the opportunity,” Kallo says.
Nomura analyst Romit Shah is one of the biggest Tesla bulls on Wall Street, but he says the truck’s value for investors will come down to numbers, not technology.
“We believe that Tesla must demonstrate a lower cost of operation for the new truck,” Shah says. “And given that the cost of the driver is the largest component (30 to 40 cents per mile), the company’s self-driving technology is an important part of the cost equation.”
But while some analysts see the truck as a major opportunity for Tesla, others see it as an unwelcome distraction as the company struggles to scale up Model 3 production. Bernstein analyst Toni Sacconaghi says trucks will not move the needle.
“On net, despite a potentially compelling value proposition, we do not see the Tesla semi opportunity as a thesis-changing initiative for the company, at least initially,” Sacconaghi says.
“It is somewhat unclear why the company needs another major initiative (beyond Model 3, forthcoming Model Y, battery production, solar roofs and energy storage) on its already full plate.”
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Baird has an “outperform” rating and $411 price target for Tesla stock. Nomura has a “buy” rating and $500 target. Bernstein has a “market perform” rating and $265 target. TSLA shares traded around the $316 level mid-Thursday.
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