Tesla witnessed a 2% decline in share price following the launch event of its long-awaited Cybertruck, which raised concerns over its hefty price and the timeline for economic returns. The electric truck’s base price is set at a substantial $60,990, a figure that exceeds CEO Elon Musk’s initial projection by a significant margin.
“Cybertruck’s impact on Tesla’s financials in FY24 is not substantial,” noted analysts at Wedbush. Bernstein analysts have put forth a conservative estimate of 250 Cybertruck deliveries for the current year, with an ambitious target of 75,000 for the next. These goals may be on the high side, according to industry experts. Musk has shared aspirations to hit a yearly production goal of a quarter-million Cybertrucks by 2025.
Tesla has openly acknowledged the hurdles in scaling up Cybertruck production and reaching a state of positive cash flow, which is likely to be achieved by the middle of 2025, a factor that could impinge on the company’s earnings.
Bernstein analysts underscored a gap in Tesla’s product range, with an older lineup that fails to meet wider market needs and no new vehicles aimed at the mass market until potentially late 2025, at a time when the company is grappling with a dip in demand for electric vehicles and stiffer rivalry.
Closing at $235.45, Tesla’s market capitalization was braced for an estimated $15 billion reduction. Despite this, Tesla’s stock has recovered impressively this year after a sharp drop last year.
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Entering a fiercely competitive pickup truck arena two years behind its initial schedule, the Cybertruck will challenge established models like Ford’s F150 Lightning, as well as Rivian’s R1T and GM’s Hummer EV.
The Cybertruck is seen as a “halo product” according to RBC Capital Markets’ Tom Narayan, intended to enhance Tesla’s brand appeal and steer customers towards its mainstream vehicles, the Model 3 and Model Y.
