Tesla Cybertruck... I’m Calling BS

Hi All,

Tesla has recently unveiled their new Cybertruck, which is slated to be available in late 2022 – nearly 3 years away. The unveiling went viral after the prototype’s unbreakable glass unexpectedly shattered (though did not fall all the way to the ground) when a metal ball was thrown at the window.

The styling is futuristic, but feels quite old school – almost like a Delorean on steroids. As a truck owner, I don’t see how this really qualifies as a truck, but that is not the point of my writing.

The point of my writing is that I am calling BS (bull) on today’s news that helped Tesla’s stock rally (at least initially), which is that they have received 200,000 pre orders with deposits for the new Cybertruck, which is expected to have a base fee of $40,000. Receiving 200,000 preorders would normally sound extremely bullish as this equates to roughly $10 billion in revenue.

However, there are too many red flags for this to be believable. Here is what I see on first glance:

• Red Flag #1: Preorder deposit is only $100 and it is refundable. This is the biggest red flag, as it will be easy for Tesla, or any large investor who has an interest in making the company look good, to get preorders really high, knowing demand really won’t be there in 3 years. Any joe shmoe can make a $100 preorder with little to no risk of actually paying out the $40k-$50k for the truck when it is actually produced.

• Red Flag #2: Tesla already has production capacity issues and cash flow issues. YTD they have barely delivered 200,000 vehicles across all their models, and they do not have the money to build more factories to increase capacity.

• Red Flag #3: Elon Musk has a history of playing games with investors and making things sound good. Yes, I will grant that perhaps Musk is a visionary but the reality is that he has never made a dime in actual profits for a company. Solar City was bankrupt before he used Tesla to bail it out on weak “economies of scale” arguments. Telsa itself has accumulated losses of $6.5B, which has been funded by speculative investing and debt financing (good luck in the repayments). The Boring Company and SpaceX are only in existence because of government contracts – trust me, they are not making any money. Musk is not above games to get the stock price up, think “funding secured” at $420 per share, when, in actuality, he was just lying to get at the short sellers.

I do believe electric trucks are coming soon, but Tesla will be lucky if they can be a player at all, and I continue to believe that Musk is a smoke and mirror guy with a house full of cards that is barely hanging on.

All this is my own opinion and investors should do their own research and form their own opinions.

Good luck,
Brian