Tesla Analysts Groan At Cybertruck's Final Pricing, Warn Of $10K Loss Per Vehicle At Current Production Rate

The reception to Tesla, Inc.‘s TSLA Cybertruck delivery event was muted among analysts, with two notable bulls offering cautious commentaries following the launch of the newest vehicle from the electric vehicle pioneer’s stable.

Analysts Harp On Disappointing Pricing: At the current production level, Tesla could be losing $40,000 on each vehicle, said Deepwater Asset Management co-founder Gene Munster in a CNBC interview late Thursday. The loss will likely narrow when the company gets to the scale of making 10,000 units, he said.

“I’ve been waiting for this for four years. I was disappointed today in the price,” the fund manager said, adding “I have a reservation [but] I don’t know if I’m going to get it,” he added.

In a separate video posted on X, formerly Twitter, Munster said pricing across the trim levels was 20-25% higher than what he expected. The high-end trim, namely the Cyber Beast, and the all-wheel drive versions are priced at $99,000 and $80,000, respectively, and the single-motor rear-wheel drive, which will be available in 2025, has a price tag of $61,000, he noted.

Compared with Ford Motor Co.’s F F-150 Lightning, Munster said each of Blue Oval’s versions is around $10,000 lower. That said, the analyst sees the Cybertruck as a superior product. It’s about 15%-20% longer, is more durable, and has better performance, he said.

The fund manager, however, said Tesla is doing the right thing by keeping prices higher as it can’t produce enough of the EV in the near term to meet demand.

Future Fund co-founder Gary Black also echoed Munster’s sentiment. In a post on X, the fund manager said the pricing was higher than his estimate.

Black previously expected the pricing of the RWD, AWD dual-motor and AWD tri-motor variants at $49,900, $59,900, and $79,900, respectively. 

He however highlighted the silver lining in the cloud. “At higher prices, there's less chance of cannibalizing Model Y/X,” he said.

See Also: Everything You Need To Know About Tesla Stock

Minimal Contribution Near Term: Munster is of the view Tesla will likely produce 35,000 units in 2024. With a higher pricing, the company will be able to capture margins with the few vehicles it would be able to deliver, he said.

The fund manager said eventually prices have to come down if Tesla wants to gain market share. “If they don’t, it’s gonna be the Model S, X all over again,” he warned.

These two high-end EVs contribute only marginally relative to the company’s mass-market EVs, the Model 3 and Y. In the third quarter, Tesla delivered 15,985 Model S and X EVs compared to 419,074 units of Model 3 and Y.

Munster noted that the light trucks category is a big market and so Tesla’s ambition should be to eventually bring prices down. The company should be able to do that in a couple of years once production volume goes up and manufacturing efficiencies improve, he said.

The fund manager sees 2026 to be the year when things get exciting as Tesla should be able to increase annual production capacity to 250,000 units.

Wedbush analyst Daniel Ives expects Tesla to produce 2,000-3,000 units of Cybertruck in 2023. The first 10,000-unit quarter will likely come in the first half of 2024, he said. Unlike Munster, Ives expects the 240,000-unit annual production rate to come sometime in 2025. The analyst said it would be longer than 12-18 months for Cybertruck to be cash-flow positive.

Ives sees the vehicle cementing Tesla’s position as an EV innovator. “While Cybertruck does not significantly move the financial needle for Tesla in FY24, it further shows the innovation and mind share lead that Tesla has built with many OEM competitors around the world still on the treadmill stuck in neutral,” he said.

Ives maintained his Outperform rating and $310 price target on Tesla stock.

In premarket trading on Friday, Tesla shares fell 0.88% to $237.97, according to Benzinga Pro data.

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