Elon Musk unveiled Tesla’s latest project recently and to say it went badly would be an understatement. The stock for Tesla dropped when the company unveiled its long-awaited pickup truck in a live demonstration that went awry. The stock fell so much that Elon Musk lost almost a billion dollars in net worth.
Elon bragged about how people want a truck that is really tough, rather than being just fake tough. He claimed to have designed a truck that could take a hit from a sledgehammer without being dented or broken. To show how tough the truck was, he asked a designer to take a sledgehammer to it. Amazingly, there was no damage. Then things went wrong when the truck was given its next test and the designer threw a metal ball at the windows. The so-called “armor-glass” window shattered to the surprise of everyone – especially Musk, who could be heard saying, “Oh my f**king God.”
Things went from bad to worse when a second ball – this one thrown with a bit less force – also broke the other window. Musk tried to explain the situation away, stating that “For a weird little reason, it broke now and I don’t know why. We’ll fix it in post.”
While amusing for some, the demonstration didn’t do much to boost confidence in the cybertruck sturdiness, especially given the radical, somewhat strange design it had. The share price for Tesla dropped around 6% since the market closed, bringing Elon Musk’s net worth down $768 million to $23.6 billion.
Wall Street remains fairly divided on Tesla as a whole. Bloomberg says that 12 of the 35 analysts they track have recommended that people buy the stock, nine have issued holds, and the other 16 issued sells. All analysts agree that the design of the truck is polarizing.
Deutsche Bank analyst Emmanuel Rosner – who issued a hold rating for Tesla – wrote about the truck for a research note. Rosner questioned whether or not there will be interest in the truck because of the design and whether commercial buyers in particular would have faith in the durability of the truck. In particular, Rosner noted that the “shattering of the truck’s unbreakable glass windows during the live demonstration was not a good start.”
Others have been more bullish on the truck, including Baird analyst Ben Kaillo. Kaillo argues that the advanced features of the truck will win over consumers even if they have reservations about the design. He also downplayed the accident in the demonstration, saying that it was “unfortunate and provided some good meme fodder” but that “ultimately we do not think the broken window is particularly significant and should not overshadow the rest of the unveiling.” He believes that the window break is nothing more than a funny footnote in an otherwise impressive display.
It’s hard to argue his point. Many people were laughing at the truck, but perhaps that’s not what Elon Musk was hoping for.