Tesla Stock: Don’t Bet on Tesla Heavy-Duty Semi Truck Just Yet

Tesla StockIs It the Right Time for the Tesla Pickup Truck? 

Tesla Inc (NASDAQ:TSLA) is probably the most polarizing—and exciting, depending on who you ask—company in the world today. Rarely does a day pass without the company grabbing a headline or two and setting off far-flung discussions that touch on energy, the car industry, the Tesla stock price and everything in between.

With such a massive, polarizing presence, it’s easy to see how the company would be pulled in a million different directions at once. With this much on the line, any mistake could be catastrophic, while each success could be monumental.

As such, the discussion surrounding the Tesla electric truck is particularly interesting. In fact, the Tesla heavy-duty semi truck strategy might become one of the most important ones for the company.

Here’s the deal: Tesla has a ton on its plate already. Between the Tesla “Model 3” deliveries that have just begun to roll out (more on this later) and stock prices behaving in a rather volatile manner, there’s a fair argument to be made that Tesla needs to cool its lithium batteries before jumping into yet another area in need of disruption.

tsla stock chart

Chart courtesy of StockCharts.com 

Tesla Heavy-Duty Semi Truck

The Tesla heavy-duty semi truck is, as it the name implies, Tesla’s answer to the commercial side of vehicle production. Up to this point, Elon Musk and co have been focused on creating consumer vehicles that run on lithium battery fuel cell technology and essentially offer the average driver the chance to eschew the gas pump.

The Tesla Model 3 deliveries represent the manifestation of that vision, as the Model 3 is the first modestly priced offering from Tesla that could see genuine full-scale adoption. Whereas previous Tesla cars could easily run up the buyer more than $80,000, this new car comes in at a more-affordable $35,000. Many investors are keenly watching the Model 3, as its success or failure will have a massive bearing on Tesla stock.

Also ReadTesla Forecast for 2020

Many are also concerned that Tesla may not be able to meet its production numbers. The company has struggled to meet its goals, so, even though there’s a great deal of demand for the car as represented by the 300,000 pre-orders it amassed in a few short days upon its release, there’s still concern over whether those cars can make their delivery dates.

Not to mention that Tesla has spent a great deal of money—more than a billion dollars this year—to prepare for the rollout of the Model 3s. (Source: “New Tesla Model 3 orders unlikely to ship before end of 2018,” CNN, June 6, 2017.)

So the timing is simply not right for the company to be investing too many resources into the Tesla heavy-duty semi truck. Which isn’t to say the company should forget all about the truck; far from it. There’s a great deal of money to be made as the trucking industry is looking toward mass automation in the coming years. Tesla is in a great position to take advantage of that shift. But it’s important to stay focused, and what Tesla stock needs now more than anything is a solid, successful rollout of the Model 3.

Semi Truck Challenges 

One of the biggest problems facing Tesla when it comes to the Tesla electric truck is that competition in the industry is fierce. Many companies have seen the writing on the wall regarding the trucking industry and have looked to make their respective moves to seize the market.

Take the Swedish company Einride, for instance. It has already locked in a shipping route that it hopes to occupy with its autonomous trucks by 2020. (Source: “This self-driving truck has no room for a human driver — literally,” The Verge, July 5, 2017.)

The electric truck competition is not going to go away and, with many companies like Alphabet Inc (NASDAQ:GOOG) and Apple Inc. (NASDAQ:AAPL) vying to also make an impact on the future of the auto industry, Tesla would be better served by getting a handle on the car market before branching out.

What the Tesla Truck Concept Means for Tesla Stock 

At the end of the day, Tesla is a massive company with a huge number of resources and one of the most exciting products on the market. The company’s vision is anything but unambitious, and its leader, Elon Musk, is about the closest we have to a real-life Tony Stark. While some are scared by Tesla stock, I think there’s a lot of value in there to be found.

But the key to maintaining that value is making smart decisions. Going after the trucking industry is certainly a good business move, and one that Tesla should explore, but the question here is the timing. With so many balls in the air, it’s easy to lose track of one or two.

With the stock experiencing volatility over recent weeks and a good number of people hoping for TSLA stock to plunge, it would serve Tesla best to ensure that the Model 3 rollout is its No. 1 focus, because if the Model 3 fails, the Tesla electric truck definitely won’t be enough to save the company.