Five Major Uncertainties Preceding the Tesla Cybertruck Delivery Event

Five Major Uncertainties Preceding the Tesla Cybertruck Delivery Event

More than 130 days have passed since Tesla's announcement of the inaugural Cybertruck from its Texas plant. Yet, as the eagerly awaited delivery event looms just two days away, critical details such as pricing, vehicle specifications, and the recipient list remain conspicuously undisclosed. These lingering uncertainties cast shadows over the Cybertruck's market reception and potential profitability.

As the clock ticks toward the Nov. 30 event at 2 p.m. Central Standard Time, essential aspects like pricing, driving range, technical specifications, production scaling, and the event's guest list remain in the dark. Despite Tesla's stock surging by 4.5% to 246.72 and surpassing its 50-day moving average in recent market sessions, key information gaps persist, potentially impacting the Cybertruck's demand.

Elon Musk's warnings about the steep production ramp and broader economic caution during Tesla's Q3 earnings report on Oct. 19 cast further uncertainty. The aftermath saw Tesla's shares plummet by 9.3%, triggered by disappointing Q3 earnings and a 37% decline in earnings per share to 66 cents, marking a two-year low for CEO Elon Musk. Despite a 9% revenue increase to $23.35 billion, Tesla's auto gross profit margins, excluding regulatory credits, dipped to 16.3%.

With the Tesla Cybertruck's imminent release, the lack of clarity on critical details underscores the volatility surrounding this highly anticipated event and its potential ramifications on Tesla's future trajectory.

More than 130 days have passed since Tesla's announcement of the inaugural Cybertruck from its Texas plant. As the eagerly awaited delivery event approaches on November 30, significant uncertainties persist. Elon Musk's cautionary statements during the Q3 earnings call about the Cybertruck's profitability and production challenges have raised concerns among analysts.

Jefferies analyst Philippe Houchois suggested the potential shelving of the Cybertruck, emphasizing that its cancellation, albeit improbable so close to delivery, could benefit Tesla's shares. On a similar note, Morgan Stanley's Adam Jonas highlighted the importance for Tesla to hit consensus earnings estimates while successfully launching new vehicles, including the Cybertruck, underscoring its impact on market sentiment.

Despite the initial price announcement of $39,900 in 2019, Tesla has refrained from confirming the Cybertruck's current pricing, with speculations hinting at a possible increase from the initial estimates. While Kelley Blue Book anticipates a $50,000 price tag, speculation on multiple trims and pricing variations prevails, ranging from $50,000 to potentially higher figures for dual and trimotor versions.

Speculation abounds regarding the vehicle's specifications, including the range per charge, charging rates, cargo and passenger volume, and options packaging, with updated details expected to emerge during the Thursday event. Leaked images suggest potential changes in payload and towing capacity compared to the initial claims made during the 2019 launch.

As for the recipients of the first Cybertrucks on Thursday, uncertainty looms over who will receive them and how many will be delivered. With around 2 million reservations and conflicting reports on production readiness at the Texas plant, speculation persists regarding the delivery strategy—whether a select group, such as Tesla employees, will receive the initial batch to manage fourth-quarter costs.

Amidst these speculations and uncertainties, the Cybertruck's imminent delivery event remains a focal point, with industry watchers eagerly awaiting crucial details that could significantly impact Tesla's trajectory in the electric vehicle market.

Tesla's stock has surged by over 17% this November, coinciding with the imminent start of preliminary Cybertruck deliveries on November 30th.

Tesla's stock is shaping a double-bottom base, marking a potential buy point at 278.98 as per MarketSmith analysis. Currently hovering approximately 15% below this designated buy point, there's a trendline stemming from the July 19 high that might present an earlier entry opportunity, currently sitting at around 253.

Since the onset of 2023, Tesla's stock has surged by roughly 90%, showcasing remarkable outperformance when compared to the broader S&P 500 index.

In the context of the 35-stock IBD automaker industry group, Tesla holds the sixth position. Its Composite Rating stands at 88 out of a possible 99, reflecting robust fundamentals. Additionally, the stock boasts an 86 Relative Strength Rating and an 88 EPS Rating, emphasizing its strength in terms of earnings and stock performance.

 

 

--------This article is partly excerpted from Investor's Business Daily.

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