Wall Street's reaction to Tesla's Nov. 30 release of the Cybertruck was muted, to say the least. The stock fell slightly on the day following the launch event, and even some Tesla (TSLA) -) bulls expressed skepticism.
Morgan Stanley analyst Adam Jonas, with a price target of $380 on the stock, wrote in a Nov. 30 note that the Cybertruck represents a "moonshot" project that will make up less than 5% of revenue and around 0% of profit by 2025.
Jonas expects Tesla to deliver 50 Cybertrucks in 2023, 30,000 in 2024 and 78,000 in 2025.
Related: Tesla CEO Elon Musk pits his brand new Cybertruck against a Porsche 911
Tesla CEO Elon Musk has said that he expects Tesla to produce 250,000 Cybertrucks a year by 2025, in line with an October estimate by TF International Securities analyst Ming-Chi Kuo.
Tesla has delivered more than 1.3 million vehicles throughout the first three quarters of 2023, with goals of making at least 1.8 million deliveries by year-end.
Musk, who has regularly trumpeted the difficulties the company is facing in attempting to ramp production on the Cybertruck, said on his third-quarter earnings call that it could take up to 18 months for the vehicle to become profitable.
"We dug our own grave with Cybertruck," he said at the time. "The ramp is going to be extremely difficult. There's no way around that."
The cheapest Cybertruck model, a Rear-Wheel Drive model, starts at $60,990 and will not be available until 2025. The All-Wheel Drive starts at $79,990 and the "Cyberbeast" starts at $99,990.
Related: New report highlights a major speedbump to mass electric vehicle adoption
The other side of the Street
While Deepwater's Gene Munster said that the Cybertruck is currently priced as a niche product — a concern among analysts like Jonas — he thinks the result will be a boon to the company.
The vehicle, Munster said, is currently priced 25% above expectations and at least $10,000 above the Ford F-150 Lightning.
But pricing it out of reach, according to Munster, was the right call.
"Elon knows the impact price has on demand and is signaling to the market to be patient when it comes to deliveries ramping," Munster wrote.
He said he expects the Cybertruck waiting list to fall below 500,000 over the next six months due to the inaccessibility of the price. Munster predicted that Tesla would sell 35,0000 of the trucks in 2024 and 125,000 in 2025 before hitting that quarter-of-a-million volume mark in 2026.
By 2025, Munster said that the Cybertruck will account for only 5% of deliveries. By then, however, Munster expects pricing to come down by about 25% as production efficiency and ramp begin to improve.
Gary Black, managing partner of the Future Fund, expects the Cybertruck to hit that 250,000 mark as early as 2025. He wrote in a post on X that he believes the vehicle will create a "halo effect" across Tesla's business, and that Wall Street is severely undervaluing the truck.
"Narrative shift toward Tesla being the only investable EV company. Competition can’t keep up," he said.
This latest in the way of all-electric trucks comes as legacy automakers are pulling back their investments, banking, according to Munster, on mass EV adoption taking 10 to 20 years.
Tesla, he said, is investing as though mass adoption will occur over the next five years.
"If Tesla is right, traditional carmakers are making a mistake by slowing their investment," Munster wrote. "If traditional carmakers are right, Tesla is making a mistake by over-investing into a future that will take time."
Shares of Tesla fell by about 1% Monday.
Contact Ian with tips via email, ian.krietzberg@thearenagroup.net, or Signal 732-804-1223.
Related: Investors have finally had enough of Tesla CEO Elon Musk
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