Tesla Inc. and Ford Motor Co. made significant announcements regarding their electric pickup trucks, causing a stir in the EV industry and impacting related stocks, including General Motor Co.
Tesla's Cybertruck Hits Production Line
Over the weekend, Tesla's first Cybertruck was successfully manufactured at their Austin, Texas assembly line. The company marked this milestone by sharing an enthusiastic tweet. Tesla's Cybertruck has generated significant anticipation and excitement in the market.
Ford Slashes Prices for F-150 Lightning
In response to the competition posed by Tesla's Cybertruck and other newcomers like Rivian Automotive Inc., Ford announced substantial price cuts for the F-150 Lightning. The F-150 Lightning is the electric variant of Ford's highly popular F-150 pickup truck.
Wedbush analyst Dan Ives commented on Ford's price cuts, stating that the company's executives, including Chief Executive Jim Farley, are feeling the pressure from upcoming competitors like the Cybertruck and Rivian Automotive Inc.
Stock Market Impact
The news of Tesla and Ford's developments had a direct effect on stock prices. Ford shares experienced their lowest close in three weeks and the largest one-day percentage drop in six weeks. Similarly, GM stock saw a decline of 3%, marking its most significant one-day percentage decrease since late May.
Fisker Inc. Bucks the Trend
In contrast to the overall market response, Fisker Inc. saw a positive outcome. Fisker, a company known for focusing on design and consumer interfaces while outsourcing manufacturing to third parties, experienced a more than 4% increase in stock price. This rise in value followed a two-day losing streak and allowed Fisker to achieve its highest stock price in a week.
Tesla's Third-Quarter Earnings Season Commences
Tesla is set to kick off the third-quarter earnings season for both auto manufacturers and auto-parts suppliers. The electric vehicle (EV) maker is scheduled to report its results after the bell on Wednesday.
A Year of Ups and Downs for Tesla
According to analysts at ISI Evercore, Tesla has experienced a rollercoaster of events throughout this year. Despite facing fluctuating market conditions, the company has managed to maintain a market cap of $800-900 billion. This achievement can be attributed to the excitement surrounding AI and technology, as well as the numerous charging announcements from original equipment manufacturers (OEMs) who are preparing to utilize Tesla's fast-charging network.
Potential Challenges Ahead
However, the analysts expect that Tesla may face downward earnings revisions in the future. One contributing factor could be a possible reduction in vehicle prices, which may lead to a drop in revenue. It is important to note that any negative sentiment regarding Tesla is primarily linked to the stock itself.
Continuing to Lead the EV Market
Despite potential challenges, Tesla remains the leader in the EV market within the United States. Additionally, it is part of a global duopoly alongside China's EV manufacturer BYD CO. Ltd. Until Tesla's cheaper next-generation vehicle is launched, the company has gradually exhausted its current models' total addressable market.