Analyst: Departure Of Tesla Trucking Head Is Good News For Legacy Truck Makers

Tesla Inc TSLA announced on Monday its latest in a long line of executive departures, and one analyst said it could be good news for legacy truck makers.

What Happened? Tesla announced Jerome Guillen, president of its Heavy Trucking unit, is leaving the company after only three months in the role. Prior to his role in trucking, Guillen had previously served as the head of the company’s entire vehicle business since 2018 and had been with Tesla for 10 years.

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Why It’s Important: On Tuesday, Bank of America analyst Ross Gilardi said he didn’t know the specific reasons for Guillen’s departure. However, Tesla has a reputation for missing deadlines and targets, and the company has previously guided for Tesla semi-truck deliveries to begin in 2021.

Any potential delay in the Tesla semi-truck timeline is good news for legacy truck makers, Gilardi said. He said Tesla was once viewed as the main disruptor of the trucking space, but that status may be threatened in coming quarters.

Gilardi said there will be a wave of new BEV (battery electric vehicle) launches coming the next six to 12 months from a long and growing list of competitors, including Nikola Corporation NKLA, Daimler ADR DMLRY, PACCAR Inc PCAR, Volvo ADR VLVLY and others.

Gilardi said his top trucking stock picks are Cummins Inc. CMI and CNH Industrial NV CNHI.

“As we’ve noted, as all of this technology development is occurring, OEMs are more likely to outsource more of their diesel engine production to suppliers like Cummins, which was part of our recent upgrade of Cummins,” Gilardi said.

Benzinga’s Take: Up to this point, the global EV market has been Tesla and mostly a bunch of hype from potential Tesla competitors.

Over the next couple of years, investors will get a clear picture of just how defensible Tesla’s first-mover EV advantage is, and which of Tesla’s potential competitors can actually live up to the hype.

(Photo: Semi-truck via Tesla)