Kevin O’Leary: Tesla’s Cybertruck has ‘a really ugly look,’

Kevin O’Leary: Tesla’s Cybertruck has ‘a really ugly look,’

“Shark Tank” star and O’Shares Investments Chairman Kevin O’Leary believes Tesla’s (TSLA) Cybertruck is setting the electric-vehicle maker up for another big shift in its fortunes.

“It’s going to be a boom, because that crazy-looking vehicle has already shown its popularity on preorders two years,” O’Leary told Yahoo Finance Live.

“It’s a very interesting vehicle. It’s got a really ugly look. Ugly is interesting. And, you know, to be honest with you, I’ve got investments in providers that are providing technology for that truck. And we know the demand is huge,” he added

The design may be giving off tech-forward brutalist vibes, but that could be positive overall for its production efficiency.

Tasha Keeney, director of investment analysis & institutional strategies at ARK Invest, said the vehicle is “the most misunderstood vehicle release that Tesla has had.”

“This is really a genius design. It’s much more cost effective. It’s unlike any other car that we’ve seen out there— and from an aesthetic basis,” Keeney told Yahoo Finance Live

“But really, because they’re, you know, using just one piece of material, they’re not using paint, it’s going to be a lot more cost effective and easier to produce for them, because we know that the paint shop is, you know, somewhat of a choke point for throughput in an automotive factory,” Keeney added.

Tesla CEO Elon Musk expects the long-awaited Cybertruck will hit mass production in 2023. He has touted that orders crossed 250,000 in the first week of availability — but media reports estimate the total number of reservations are north of 1.5 million for the model.

The number of orders received may translate into added margin for the auto manufacturer, in the eyes of O’Leary.

“The one thing I really like about the story that I learned yesterday on the whole Elon thing, the margins on this truck could be really high,” O’Leary said. “I mean, this is going to be— because they’ve had so much efficiency in manufacturing costs since they announced the truck. They’re probably picking up, you know, 10% to 12% more margin on that thing.”

Tesla stock has been one of the top ten S&P 500 performers this year, despite a first-quarter delivery miss that dented year-to-date shareholder returns.

The company held its annual shareholder meeting in Austin, Texas on May 16, where Musk said: “Tesla is not immune to the global economic environment.” That acknowledgement is significant for the EV maker, as it has yet disclose the price for its truck with a shape as unconventional as its go-to-market strategy.

As long as the Cybertruck’s price is competitive with those for pick-up trucks currently on the road, the vehicle may well offer Tesla a successful first foray into the automotive category without sacrificing demand witnessed by deposits.

“I just don’t think the vehicle is getting enough attention for the genius cost dynamics here, especially when people are commenting that they’re worried about demand, price action for electric vehicles,” Keeney said. “You know, this is a car that allows Tesla to get great margins and to be able to charge attractive prices compared to the competition.”

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