Tesla falls on long wait for Cybertruck payoff, hefty price tag

Shares of Tesla (NASDAQ:TSLA) declined over 3% following the launch of its much-anticipated Cybertruck, raising concerns among analysts about the electric vehicle’s high price and an extended timeline for substantial financial returns.

The starting price of $60,990 for the long-delayed Cybertruck is more than 50% higher than CEO Elon Musk’s 2019 projection, potentially limiting its appeal to select, affluent buyers. Wedbush noted that the Cybertruck does not significantly impact Tesla’s financials in FY24. Bernstein analysts were cautious, forecasting 250 deliveries this year and 75,000 for the next, deeming these numbers possibly ambitious.

While Musk aims for a production rate of around 250,000 Cybertrucks annually by 2025, Tesla has warned of challenges in ramping up production and achieving positive free cash flow, likely not until mid-2025, which could impact profitability.

Bernstein analysts pointed out Tesla’s “product problem,” citing an aging lineup that doesn’t cover enough of the market and lacks new mass-market offerings until late 2025. The Cybertruck, being Tesla’s first new model in almost four years, is crucial for the company’s reputation as an innovator, particularly amid softer electric-vehicle demand and increasing competition.

Facing delays of two years, the Cybertruck enters a competitive pickup truck market, challenging rivals like Ford (NYSE:F)’s F150 Lightning, Rivian (NASDAQ:RIVN) Automotive’s R1T, and General Motors (NYSE:GM)’ Hummer EV. Analysts view the Cybertruck as more of a “halo” product, aiming to attract consumers to Tesla’s mainstream vehicles like the Model 3 and Model Y.