Tesla (NASDAQ:TSLA) Cybertruck was launched with appreciable fanfare. Nonetheless, a bit of over a yr because the futuristic pickup began rolling out to prospects in November 2023, gross sales seem like struggling.
Tesla initially reported that it had effectively over 1 million reservations for the Cybertruck and early tendencies had been fairly robust. Cybertruck emerged because the bestselling electrical pickup within the U.S. over Q2 2024 as manufacturing ramped up and the corporate targeted on fulfilling the backlog of orders. Nonetheless, the momentum has waned significantly since then. Though Tesla doesn’t get away supply numbers for the Cybertruck, we do have some context. Over This fall 2024, Tesla delivered 471,930 items of its mass-market automobiles the Mannequin 3 and Y, whereas gross sales of the Mannequin X, S, and Cybertruck mixed stood at nearly 23,640. Now Tesla bought about 17,147 items of the Mannequin X and S in This fall FY’22, a yr earlier than the Cybertruck launch. Assuming that Mannequin S and X gross sales have remained flat, it implies that gross sales of the Cybertruck had been probably nearly 6,000 items for the This fall 2024 accounting for lower than 1.5% of Tesla’s complete volumes. So what’s holding the electrical pickup truck again and what does it imply for Tesla inventory? Individually, if you would like upside with a smoother experience than a person inventory, contemplate the High Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.
What Has Impacted Demand?
A number of components have dampened demand for the Cybertruck. The ultimate product launched by Tesla deviated from the preliminary specs the corporate talked up at its unveil occasion again in 2019. Whereas Tesla initially marketed a beginning worth of $40,000 in 2019, the bottom rear-wheel-drive variant is now priced at about $61,000 – over 50% larger than initially promised and this mannequin hasn’t been launched but. Tesla at present solely sells the dual-motor all-wheel-drive variant which at present begins at $80,000, whereas the top-tier “Cyberbeast” mannequin is priced at $100,000. Apart from the pricing, the pickup additionally launched with a lower-than-promised driving vary and a diminished payload capability. For comparability, Rivian’s extremely acclaimed (and barely smaller) R1T has a beginning worth of $70,000, whereas Ford’s extra conventionally styled F-150 Lightning is priced at about $55,000 and upward. The upper price ticket and lower-than-promised specs probably meant {that a} good chunk of the preliminary pre-orders, which required a $100 refundable cost, didn’t transfer ahead with their orders. See how Trump can drive Tesla Stock To $1,000.
It’s additionally fairly sure now that manufacturing isn’t a difficulty. Tesla has elevated its reductions in addition to incentives for the truck over the past quarter and Cybertrucks had been out there in lower than per week put up order, as of late 2024. There have been reviews that Cybertruck line staff had been apparently requested to not come to work for 3 days in December – one other signal that demand is cooling. Furthermore, among the Cybertruck manufacturing workers at Tesla’s Austin manufacturing unit have been shifted to meeting of the mannequin Y.
Though the U.S. pickup truck market is sort of giant, with volumes for the highest 5 gamers standing at roughly 3 million items per yr, this can probably stay a distinct segment product for Tesla. The Cybertruck, which incorporates a radical design and comes with range-anxiety points, is probably not that interesting to conventional pickup prospects who prioritize practicality and sturdiness. Buyer loyalty within the truck market could be very excessive, which means that Tesla may very well be having a troublesome time going after present homeowners. Competitors can be robust. EV upstart Rivian’s R1T pickup truck acquired rave evaluations. Equally, mainstream pickup producers are additionally seeing traction with their electrification plans, with Ford’s electrical model of its iconic F-150 seeing moderately robust demand in early 2024, though gross sales have cooled off lately.
Can Gross sales Choose Up?
Tesla beforehand indicated that it may finally manufacture about 250,000 Cybertruck pickups per yr post-2025. Nonetheless, this degree of demand seems to be impossible within the close to time period. There are some methods Tesla may use to spice up gross sales. The corporate would possibly introduce lower-priced variants or scale back entry costs, because it has achieved with the Mannequin Y and Mannequin 3 over the previous yr. Furthermore, Tesla may broaden the truck’s availability to abroad markets, although this may increasingly not considerably drive gross sales provided that the U.S. is the principal marketplace for pickup vans globally, with U.S. pickup truck gross sales estimated to be greater than twice the dimensions of the remainder of the world mixed. The 2025 Tesla Cybertruck is now eligible for a $7,500 federal tax credit score, which makes it extra inexpensive for purchasers. Nonetheless, reviews recommend the incoming Trump administration might search to eradicate this program, probably affecting gross sales within the coming months.
The rise in TSLA inventory over the past 4-year interval has been removed from constant, with annual returns being significantly extra risky than the S&P 500. Returns for the inventory had been 50% in 2021, -65% in 2022, 102% in 2023, and 63% in 2024. The Trefis Excessive High quality (HQ) Portfolio, with a set of 30 shares, is significantly much less risky. And it has comfortably outperformed the S&P 500 over the past 4-year interval. Why is that? As a gaggle, HQ Portfolio shares supplied higher returns with much less threat versus the benchmark index; much less of a roller-coaster experience as evident in HQ Portfolio efficiency metrics. Given the present unsure macroeconomic setting round fee cuts and a number of wars, may TSLA face the same scenario because it did in 2022 and underperform the S&P over the subsequent 12 months – or will it see a powerful bounce?
We worth Tesla inventory at about $240 per share, which is effectively beneath the market worth. We stay bearish on the inventory for a few causes. Over 2024, Tesla’s deliveries declined year-over-year for the primary time in over a decade. Competitors within the EV market is heating up with Chinese language EV gamers gaining floor in worldwide markets, whereas the early adopter marketplace for EVs within the U.S. seems to be saturating, lowering the pool of first-time patrons. Tesla’s aggressive worth cuts over the previous yr, aimed toward spurring demand, additionally seem to have misplaced their preliminary influence, as worth competitors grows fiercer. Tesla’s valuation put up the latest rally is hardly low cost. The inventory trades at a lofty 120x consensus 2025 earnings – and it would take fairly a little bit of time for the corporate to develop into this wealthy valuation. There’s little or no room for error if development doesn’t speed up within the coming years. See our evaluation on Tesla Valuation: Is TSLA Inventory Costly Or Low cost? for extra particulars on Tesla’s valuation and the way it compares with friends. For extra info on Tesla’s enterprise mannequin and income tendencies, try our dashboard on Tesla Income: How Does TSLA Make Cash?
| Returns | Jan 2025 MTD [1] |
Since begin of 2024 [1] |
2017-25 Complete [2] |
| TSLA Return | -2% | 59% | 2671% |
| S&P 500 Return | -1% | 22% | 160% |
| Trefis Strengthened Worth Portfolio | 0% | 16% | 745% |
[1] Returns as of 1/13/2025
[2] Cumulative complete returns because the finish of 2016
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The views and opinions expressed herein are the views and opinions of the creator and don’t essentially replicate these of Nasdaq, Inc.
