- TSLA stock closes down 0.55% for the third consecutive day, indicating potential bearish trend.
- Experts skeptical about profitability of Tesla’s Cybertruck despite impressive unveiling.
- Fed Chair Powell delivers hawkish speech, dampening hopes of interest rate cuts.
The Tesla (TSLA) stock closed at $238.75 on Friday, marking the third consecutive day of decline. This could potentially trigger a bearish Three Black Crows candlestick pattern, hinting at a possible 10% drop to the $210 support level or even further. However, Friday did see a rebound from a lower open, suggesting the trend may not be set in stone just yet.
While the Cybertruck unveiling impressed experts, the market reaction wasn’t as favorable. Additionally, Federal Reserve (Fed) Chair Jerome Powell’s speech at Spelman College on Friday morning cast doubt on the possibility of interest rate cuts in the near future.
In his speech, Powell stated, “It would be early to conclude with confidence that we have achieved an adequately tight position or to speculate on when policy may ease. We are prepared to tighten policy further if it becomes appropriate to do so.”
The unveiling of Tesla’s Cybertruck brought attention to the design’s uniqueness, but raised concerns about its impact on the company’s bottom line. CEO Elon Musk acknowledged the potential challenges, admitting that it would require significant sales volume to make the design profitable. The company only presented 10 units at the event.
Experts share a similar sentiment, but also see the potential for Tesla to expand its product range. Morgan Stanley’s Adam Jonas believes that the Cybertruck could pave the way for Tesla’s entry into the traditional trucks and SUVs market in the later part of the decade. However, they forecast the Cybertruck to remain a niche product, contributing less than 5% to Tesla revenues and no significant earnings by 2025.
Despite its unique design and towing capacity, the Cybertruck is expected to remain a niche product with limited revenue impact, priced at $61,000 before tax breaks with a battery range of 340 miles. However, Tesla claims to have 2.1 million reservations for the Cybertruck, indicating strong interest in the product.
EV stocks FAQs What are electric cars?
Electric vehicles, or EVs, are cars that use rechargeable batteries and electric motors for propulsion, rather than internal combustion engines (ICEs).
