Cybertruck Launch Countdown Begins: Munster Flags Key Hurdle Amid Rising Buzz For Tesla's 'Spectacular Vehicle That Will Catch A Lot Of Attention'

Tesla, Inc. TSLA is all set to launch its Cybertruck on November 30, and an analyst is cautiously optimistic about the next big thing from the company.

The Market: The Cybertruck will cater to a sizeable market, given sales of the light pick-up truck category it belongs to is around 3 million in the U.S., said Deepwater Asset Management’s Gene Munster. “This is a worthy market that they are going after,” he added.

The leader in the category is Ford Motor Co.’s F F-150, and Dearborn sells about 600,000 units of the pickup truck per year, he said.

The Cybertruck Production Expectations: Munster said that most Wall Street analysts project 2023 production to be as low as a few hundred, with the highest number at 10,000 units. The tech analyst expects production to pick up to 35,000 units in 2024, while Street estimates range between 25,000 and 100,000 units.

Munster sees production increasing to 175,000 units a year after. The consensus expectations for 2025 are in the range of 100,000 to 250,000 units, he said.

Tesla CEO Elon Musk implied in the past at scale, Cybertruck production will ramp up to an annual rate of 250,000 units in 2025. Munster noted that this would suggest a monthly production rate of 20,800 units. This unit rate will likely be achieved only by September 2025, the venture capitalist said. He expects a 250,000 annual rate only for 2026.

See Also: Everything You Need To Know About Tesla Stock

Demand Robust: Munster said his primary focus is production because the demand trend to be in a great place. Citing comments of Tesla on the third-quarter earnings call, the analyst said reservations are over one million units.

Munster expects half of these reservations to fall way, given there is a $100 fully-refundable deposit. But there is still a meaningful number of 500,000 real buyers, he added. He said that for the first four years, combined production would be 470,000 units, below the pent-up demand number of 500,000 units.

“Investors should not be concerned about demand but should be concerned about production,” Munster said. The reason why one should be concerned about the production numbers is from the context of Tesla’s overall production, he said.

Tesla, the analyst said, is looking at overall production to be 1.8 million units in 2023. With Cybertruck, Tesla’s delivery growth will be 25% in 2025 and 30% in 2026. Without it, the growth would be 19%-20% and 28%-29%, respectively, he said.

While calling the Cybertruck a spectacular vehicle that will catch a lot of attention, Munster said the vehicle will not cause much pop to overall delivery numbers. The reason is the limited capacity, he said. As opposed to the 250,000-annual rate seen for Cybertruck over the next several years, the Model Y and 3 production capacity is 800,000 units each currently.

In premarket trading on Monday, Tesla stock rose 0.45% at $235.35, according to Benzinga Pro data. 

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