On Thursday afternoon, after several years of hype and multiple delays, Tesla, Inc. (NASDAQ:TSLA) finally unveiled its Cybertruck at a high-profile event. However, the much-anticipated Cybertruck event turned out to be a colossal failure, leaving investors and enthusiasts dumbfounded.
Back in 2019, Tesla unveiled the Cybertruck, a deviation from the conventional pickup design for the company. Originally meant to be the 7th vehicle in Tesla’s lineup, the Cybertruck has seen its fair share of delay and uncertainty. The recent event, intended to mark a triumphant launch, landed far below expectations.
The event lacked crucial details, failing to provide specifics on key features and pricing. This absence of information only led to more disappointment among the eager audience.
While the Cybertruck has generated significant interest, especially with rumors of two million refundable deposits, the lack of concrete numbers from Tesla fuels skepticism. Furthermore, the initial enthusiasm has been dampened by the astronomical $100 deposit, offering speculative investors an opportunity to place multiple reservations, potentially flipping early production models for a profit.
With the unexpected surge in pricing, the demand for Cybertruck becomes hazy. Priced at close to $80,000 even before incentives, the Cybertruck now competes in the high-end segment, alongside Rivian’s R1T and Ford’s F-150 Lightning. This unforeseen pricing strategy has cast doubts on the anticipated surge in demand and poses a challenge to the company’s revenue trajectory.
Elon Musk’s bold ambition of ramping up Cybertruck production to 250,000 units a year comes with its own set of challenges. With initial production capacity estimated at 125,000 units, Tesla must navigate through potential hurdles and ensure a streamlined production ramp. Analysts had previously projected sales of 75,000 to 100,000 Cybertrucks in the next year, but the recent turn of events casts a shadow over these estimates.
The disharmony continues as Tesla’s revenue growth projection of over $21 billion in 2024 is at risk. Anticipated to be driven largely by Cybertruck sales, this aggressive pricing strategy may just backfire, sending Tesla’s EPS estimates plummeting further.
The disappointed investor is issuing a sell rating for Tesla primarily due to the lackluster Cybertruck event. The unanticipated pricing and range figures have sent shockwaves through the market, leaving investors on the edge. With Tesla shares trading at a significant premium and growing concerns over Musk’s controversial actions, the road ahead appears bumpy for the once-celebrated automaker.
In the end, the Cybertruck event turned out to be a classic case of shattered dreams. Elon Musk’s vision for the groundbreaking vehicle was met with crushing reality, and investors are left grappling with the fallout.