Tesla’s long-delayed Cybertruck is anticipated to finally hit the market this fall, but Elon Musk faces a troublesome road convincing Wall Street that the futuristic pickup is greater than only a gimmick.
Musk posted a series of Cybertruck glamor shots on his X account over the past week, revealing that he took a production model for a test drive at Tesla’s Texas factory — all of which fueled speculation that a proper announcement is near.
But key details concerning the Cybertruck — including its price and final specs — remain unknown. Some Tesla investors, meanwhile, are concerned that its complex design will hit profit margins – a worry made worse by the resignation of Tesla’s “Master of Coin” CFO Zachary Kirkhorn earlier this month.
Despite intense hype from Musk — who has labeled it Tesla’s “best product ever” — the Cybertruck is almost definitely to be a “area of interest vehicle in the long run,” Needham analyst Chris Pierce told The Post.
“I don’t see it as a cloth driver of the stock price,” Pierce told The Post, pointing to a “minimal probability it could possibly outweigh investor margin concerns on their legacy vehicles.”
Wedbush analyst Dan Ives, a noted Tesla bull, sees the Cybertruck as “somewhere in between area of interest and mainstay” for the corporate’s vehicle lineup. Still, Ives believes it’s going to be critical to the corporate’s long-term outlook – and to persuade Wall Street that its audacious bets are worthwhile.
“It’s essential to prove to the Street that they will talk the talk after which walk the walk, by way of Cybertruck after which, we consider next 12 months, a sub-$30,000 vehicle and eventually some crossover SUV by 2025,” Ives said.
First unveiled at an infamous event in 2019 during which Musk unintentionally shattered a “bulletproof” window, the Cybertruck’s release was delayed on multiple occasions. The primary model rolled off the assembly line at Tesla’s Texas Gigafactory in July.
Its odd design, which incorporates a stealth-bomber-angled body wrapped around a stainless-steel frame, has been compared to a refrigerator on wheels, a doorstop, a Lego block and even a cartoon character from “Spongebob Squarepants.”
Even Musk devotees show signs of getting restless with the dearth of clear information. One Tesla owner called out Musk in an X post on Wednesday, writing, “enough with the hype, let’s get down to business. Please announce the specs, pricing and recent estimated delivery event date.”
“After we are ready to accomplish that, we’ll,” Musk replied. “While I feel it’s our greatest product ever, it’s an especially difficult product to construct. We’re in uncharted territory, since it will not be like anything.”
On the identical day, Musk warned concerning the complexity of Cybertruck’s manufacturing process, telling Tesla employees in a memo obtained by CNBC that any variation “shows up like a sore thumb” since it is “made up of vibrant metal and mostly straight edges.”
“All parts for this vehicle, whether internal or from suppliers, need to be designed and built to sub 10 micron accuracy,” Musk wrote.
While the Cybertruck’s stainless-steel “exoskeleton” has been a significant talking point for Musk, it also presents a significant manufacturing challenge.
Stainless-steel is dear, difficult to shape, requires specialized welding techniques and will have trouble meeting safety regulations in some locales, experts told Wired in 2019. In May, Musk admitted during a shareholder meeting that it will be “hard to make the fee inexpensive since it is a recent automobile, recent manufacturing method.”
Still, any negative impact to margins is probably going to be a short-term hit related to ramped-up production quite than the vehicle’s complexity, according to Pierce.
“The complexity could possibly be offset by a better price in the event that they are delivering more value to consumers,” Pierce said. “The initial production ramp can’t be.”
Tesla is aiming to carve out a slice of auto industry’s lucrative pickup segment, where it’s going to face off against Ford’s F-Series and electric rival Rivian, however it stays unclear if Cybertruck’s design will hold the identical mass-market appeal of more well-established competitors.
Tesla has amassed nearly two million Cybertruck reservations, according to the Teslarati blog. Since customers are required to submit a deposit of just $100, those preorders are highly unlikely to correlate directly to sales.
Wedbush’s Ives expects mass production to begin around Halloween and the primary customer deliveries to start after Thanksgiving. Wedbush’s projections call for Tesla to ship roughly 50,000 Cybertrucks this 12 months before ramping up to 200,000 to 300,000 units in 2024.
As for price, Musk initially said in 2019 that the base-model Cybertruck would cost lower than $40,000, however it is now expected to start at roughly $50,000, according to Kelley Blue Book. The twin-motor version is projected to cost $60,000 and the tri-motor version is anticipated to cost $70,000.
The entry-level cost would put the Cybertruck on par with Ford’s rival F-150 Lightning electric truck – a move that Pierce described as a head-scratcher, given Musk’s daring proclamations concerning the vehicle.
“It likely won’t be delivered at scale to meaningfully impact company margins, but when the reservation book is where they are saying it’s, they usually have a faithful fan base of early adopters, and it’s a one-of-a-kind product, why not price more aggressively?” he said.
Wedbush’s Ives projected a slightly-higher price range of “on the low-end, $55K up to $70K” for the bottom single-motor Cybertruck, with $60,000 as a “sweet spot.”
Musk had teased major numbers for Cybertruck’s debut in the course of the company’s second-quarter earnings call in July, boasting that demand was “to date off the hook, you’ll be able to’t even see the hook.” At the identical time, he signaled that initial production could be slow due to the complexity of the vehicle’s technology.
The 52-year-old billionaire — who has a notorious habit of missing Tesla’s ambitious deadlines — said deliveries are expected to begin this 12 months, with production in “high volume” by next 12 months.
The sudden resignation of Tesla’s CFO Kirkhorn was a significant setback. Kirkhorn, who had served within the role since 2019, was considered key to Tesla’s effort to cut production costs. Still, Tesla bulls remain optimistic.
Baird analyst Ben Kallo cited Tesla’s Cybertruck as a positive for the corporate within the second half of the 12 months. In a note to clients last week, Kallo reiterated an “outperform” rating and $300 price goal. Tesla shares are currently trading at roughly $233 per share.
In July, Future Fund co-founder Gary Black, a noted Tesla investor, told CNBC that he expected the “big, daring and lovely” Cybertruck to be “home run” for the corporate and “really catapult the stock.”