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Tesla (TSLA) stock down after electric pickup unveiling — market is missing the point

Tesla (TSLA) stock price is down in pre-market trading after the unveiling of their electric pickup, the Cybertruck, last night.

However, the market might be missing the point as the Tesla Cybertruck seems to hide a major improvement in cost.

Last night, Tesla held its Cybertruck unveiling event in Hawthorne.

CEO Elon Musk had warned that the design wouldn’t be for everyone, and yet, many were still shocked by how radical the design of the Cybertruck turned out to be.

There seem to be some questions about how it will affect the appeal for the average pickup truck driver, which likely explains why the stock is down this morning.

Tesla’s stock (TSLA) was trading down as much as 3% in pre-market trading as of the time of writing.

Of course, there’s also the “buy the rumor and sell the news” factor, but investors might be missing the bigger picture.

Tesla announced a base price of $39,900 for the Cybertruck, which is significantly lower than expected and might have some wider implications.

Electrek’s Take

Based on my estimation, the base version of the Cybertruck has a battery pack with roughly 100 kWh of energy capacity.

Right now, the cheapest vehicle that Tesla is selling with a 100 kWh battery pack is the Model S Long Range, which costs $80,000.

The Cybertruck starts at half that price.

To me, it indicates some massive cost improvements both on the battery front and manufacturing front.

At $100 per kWh at the battery pack level, it would represent 25% of the cost of the Cybertruck and leave only $30,000 for everything else.

That’s not a lot to build a vehicle of that size and also get away with some profits.

This leads me to think that Tesla figured out some significant cost improvements in both battery costs and manufacturing a vehicle with this new exoskeleton structure.

I don’t think the latter can affect other vehicle programs since they don’t have the same platform, but Tesla will certainly learn from it and it could lead to a wider impact.

As for the battery cost, that should be able to have an impact across Tesla’s lineup.

In short, I think the biggest news out of the Cybertruck event is that Tesla has made some serious cost improvements in manufacturing long-range electric vehicles.

Full disclosure: I am long TSLA.

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Avatar for Fred Lambert Fred Lambert

Fred is the Editor in Chief and Main Writer at Electrek.

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