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Tesla's Elon Musk hopes CyberTruck rolls over GM, Ford

Jonathan Garber

Tesla's new electric pickup truck could be bad news for Ford shareholders and a win for CEO Elon Musk's investor base.

First, however, it has to contend with some bad news of its own. The electric automaker's CyberTruck, which starts at $39,900, was unveiled in Los Angeles on Thursday to less than stellar reviews due to the failure of its "armour glass" windows.

CEO Elon Musk asked the electric-car maker's chief designer to throw a metal ball at the vehicle's window to show it was shatterproof, but instead of withstanding the force, the window cracked. The designer made a second attempt on another window with similar results.

Tesla shares were trading lower Friday.

Citi analyst Itay Michaeli said before the debut that a strong showing would likely put more pressure on Ford shares than General Motors.

“Ford is more exposed to share-loss risk than GM, with materially higher EPS exposure,” he wrote in a note sent to clients on Thursday, adding that Ford is “more vulnerable to any resulting headline risks from the event.

Tesla shares were gaining ground ahead of the announcement while Ford and GM were lower.

Musk has made it clear he wants to roll over the industry leader, describing his truck as superior already.

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Analysts and Tesla’s competitors (Ford, General Motors, Rivian) will be paying close attention to the CyberTruck’s towing capacity, how quickly it accelerates from zero to 60 and the strength of its bed.

Wedbush analyst Dan Ives expects the CyberTruck to be “surprisingly strong, with towing capabilities north of Ford’s F150 and Rivian’s R1T, which is about 11,000 pounds.”

Rivian, a startup electric-vehicle maker, which in April received a $500 million investment from Ford, has already begun accepting preorders for its R1T pickup truck. Production of the vehicle is expected to begin in the second half of 2020.

Ford, which unveiled a prototype electric F-150 over the summer, has not yet announced a price. General Motors CEO Mary Barra announced Thursday that the automaker's planned electric pickup will go on sale during the fall of 2021.

“In a nutshell, we believe this next-generation pickup truck could help Tesla expand its market opportunity outside its core customer base over time, although gaining market share with stalwarts such as Ford and GM entrenched in this landscape will be a difficult task,” Ives wrote.

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Tesla shares are up 5.8 percent this year while GM and Ford are higher by 5.5 percent and 14.1 percent, respectively. Still, autos are trailing the S&P 500's 23.6 percent advance.

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