Barclays remains sidelined on Tesla, expects modest near-term Cybertruck volumes

Barclays reiterated a Neutral rating on Tesla (NASDAQ:) with a 12-month price target of $260.00 on the electric vehicle stock as the automaker prepares for the start of Cybertruck deliveries before the end of the year.

Barclays believes that the EV truck market is likely to remain niche for the foreseeable future, with the Detroit 3 (D3) maintaining a dominant position in the pickup market, including the EV truck segment. However, Barclays also believes that competitive threats from Tesla and EV truck maker, Rivian (NASDAQ:) should not be overlooked.

Analysts wrote in a note, “Although the truly unique nature of the Cybertruck makes for considerable unpredictability, we don’t anticipate it being a significant source of share loss risk for the full-size pickup truck offerings from the D3 in the near to mid-term.”

TSLA has discussed the possibility of annual Cybertruck production volumes ranging from 250,000 to 500,000 units. Analysts feel such a range is fair given that the radical nature of the Cybertruck design makes it challenging to rely solely on past precedents for accurate projections.

Their perspective is that traditional internal combustion engine (ICE) pickup buyers are expected to be more cautious in embracing electric vehicles (EVs) compared to the broader automobile market. This hesitancy is particularly evident among customers who heavily rely on their trucks for towing, hauling, or commercial purposes, as they express concerns about the range limitations of EV pickups. As a result, analysts foresee that EV trucks will remain relatively limited in popularity, mainly appealing to early adopters, while remaining somewhat niche in the near future.

“While we expect a very fervent and vocal base of Cybertruck buyers / owners to emerge, we suspect the design will ultimately prove too radical for the mainstream market,” added analysts.

Shares of TSLA are down 0.51% in early trading on Monday.