Tesla’s long-delayed Cybertruck is expected to finally hit the market this fall, but Elon Musk faces a tough road convincing Wall Street that the futuristic pickup is more than just 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 formal announcement is near.
But key details about 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 most likely to be a “niche vehicle in the end,” Needham analyst Chris Pierce told The Post.
“I don’t see it as a material driver of the stock price,” Pierce told The Post, pointing to a “minimal chance it can outweigh investor margin concerns on their legacy vehicles.”
Wedbush analyst Dan Ives, a noted Tesla bull, sees the Cybertruck as “somewhere in between niche and mainstay” for the company’s vehicle lineup. Still, Ives believes it will be critical to the company’s long-term outlook – and to convince Wall Street that its audacious bets are worthwhile.
“It’s important to prove to the Street that they can talk the talk and then walk the walk, in terms of Cybertruck and then, we believe next year, a sub-$30,000 vehicle and eventually some crossover SUV by 2025,” Ives said.
First unveiled at an infamous event in 2019 in which Musk accidentally shattered a “bulletproof” window, the Cybertruck’s release was delayed on multiple occasions. The first model rolled off the assembly line at Tesla’s Texas Gigafactory in July.
Its odd design, which features 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 lack 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 new estimated delivery event date.”
“When we are ready to do so, we will,” Musk replied. “While I think it is our best product ever, it is an extremely difficult product to build. We are in uncharted territory, because it is not like anything else.”
On the same day, Musk warned about 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” because it is “made up of bright 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 major talking point for Musk, it also presents a major manufacturing challenge.
Stainless steel is costly, difficult to shape, requires specialized welding techniques and could have trouble meeting safety regulations in some locales, experts told Wired in 2019. In May, Musk admitted during a shareholder meeting that it would be “hard to make the cost affordable because it is a new car, new manufacturing method.”
Still, any negative impact to margins is likely to be a short-term hit related to ramped-up production rather than the vehicle’s complexity, according to Pierce.
“The complexity could be offset by a higher price if 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 will face off against Ford’s F-Series and electric rival Rivian, but it remains unclear if Cybertruck’s design will hold the same 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 first customer deliveries to start after Thanksgiving. Wedbush’s projections call for Tesla to ship roughly 50,000 Cybertrucks this year 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 less than $40,000, but it is now expected to start at approximately $50,000, according to Kelley Blue Book. The dual-motor version is projected to cost $60,000 and the tri-motor version is expected 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 bold proclamations about the vehicle.
“It likely won’t be delivered at scale to meaningfully impact company margins, but if the reservation book is where they say it is, and they have a devoted 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 base single-motor Cybertruck, with $60,000 as a “sweet spot.”
Musk had teased major numbers for Cybertruck’s debut during the company’s second-quarter earnings call in July, boasting that demand was “so far off the hook, you can’t even see the hook.” At the same time, he signaled that initial production would 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 year, with production in “high volume” by next year.
The sudden resignation of Tesla’s CFO Kirkhorn was a major setback. Kirkhorn, who had served in 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 company in the second half of the year. In a note to clients last week, Kallo reiterated an “outperform” rating and $300 price target. 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, bold and gorgeous” Cybertruck to be “home run” for the company and “really catapult the stock.”
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