The launch of Tesla's (TSLA) long-awaited Cybertruck wasn't enough to boost the shares of the electric vehicle maker on Friday.
The truck's price came in significantly higher than many had expected with the lowest-grade model starting at $60,990 before any electric vehicle-related tax benefits. In 2019, Tesla had said it expected to price the truck at $39,900.
For investors, questions still loom about the demand for Cybertrucks, which can cost nearly $100,000 for the top model.
"There were a lot of folks in 2019 that wanted this product," Tom Narayan, lead equity analyst for global autos at RBC Capital Markets, told Yahoo Finance live on Thursday. "I'd expect the conversion rate [from reservations] to be about 20%."
The stock fell more than 2% in morning trading on Friday.
Narayan noted that the truck, which has few physical resemblances to a classic pickup truck, has always been targeted at a "pretty specific niche customer." And in some ways Tesla CEO Elon Musk admitted as much.
"Finally, the future will look like the future," he said about the truck's design, which has been a sticking point for some customers.
Musk spoke at the event in a dimly lit room just days after he cursed out advertisers leaving X in an interview with New York Times.
https://t.co/fUH5fMqGcM - Cybertruck Delivery Event live stream NOW!!
— stevenmarkryan (@stevenmarkryan) November 30, 2023
The truck's launch caps off a topsy-turvy year for Tesla, which has seen its stock price soar on the possibilities of its artificial intelligence goals while also coming under pressure amid multiple price cuts and weakening margins.
"It's really being used to sell [Model] 3s and [Model] Ys," Narayan said. "That's how we should look at the Cybertruck. It's really a halo car designed to incite demand for 3s and Ys; that's where most of the volume is going to come from next year."
Narayan, who has a 12-month price target of $301 and an Outperform rating stock, doesn't believe Cybertruck sales will be a key driver for the stock moving forward. He noted the truck was never intended to be a high-volume product.
He added that his long-term projections for Tesla stock account for about 10% of growth coming from car and truck sales while 90% is based on "autonomy."
"None of this is really going to matter. It's going to be all about autonomy, and software and robotaxi and [full-self driving]," Narayan said.
Read more: Are electric cars more expensive to insure?
Josh Schafer is a reporter for Yahoo Finance.
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