Tesla Bull Calls Cybertruck 'Niche Product': 'Demand Will Be Limited … Until Pricing Comes Down'

Electric vehicle giant Tesla Inc TSLA held a Cybertruck delivery event last week.

The event saw the first Cybertruck deliveries take place and the pricing details of the highly anticipated electric pickup truck unveiled.

What Happened: Many analysts and experts see the Cybertruck having technology and features that place it ahead of legacy automotive manufacturers and other electric pickup trucks on the market. The key concern is the pricing, which came in higher than expected.

Deepwater Asset Management's Gene Munster said the Cybertruck was priced 25% higher than what many were expecting.

"That means demand will be limited for the next couple of years until pricing comes down," Munster said.

Munster notes that the Cybertruck is around $10,000 more expensive than the F-150 Lightning pickup truck from Ford Motor Company F.

While the price was higher than expected, Munster shared reasons why this might be the case.

"The company is making the right decision to price it above the market given its undeniable wow factor, and early adopters are willing to pay premiums to be in the first 50k deliveries."

The technology investor said it was important to note the advancements of the Cybertruck.

"Importantly, the Cybertruck is the latest evidence that Tesla makes the best electric vehicles in the world and is pulling ahead as traditional auto mistakenly slows their EV pursuit."

Munster said the steel frame for the Cybertruck could become the "new gold standard for durability and rugged performance."

The tech investor said the Cybertruck "is a niche product today," but added it could reinforce Tesla's lead in electric vehicles.

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

Why It's Important: Demand for the Cybertruck has been strong dating back to the vehicle's unveiling in 2019.

Third-party estimates say there could be over two million units reserved, with Tesla confirming over one million people on the waitlist during its recent third quarter earnings call.

Munster questions if some people who previously reserved a Cybertruck, via a $100 deposit, will drop off the list.

"I believe that waiting list will decline to sub 500k over the next six months given the reality that this is an expensive vehicle," Munster said.

Tesla CEO Elon Musk previously tempered expectations regarding the Cybertruck’s production numbers until its ramp-up phase. The company has guided for 250,000 Cybertruck units produced annually by 2025.

Munster's estimates for deliveries are 35,000 in 2024, 125,000 in 2025 and 250,000 in 2026.

"Tesla believes the inflection curve will hit in the next five years, and they can use their will-of-force to make this a reality."

Munster said Tesla's output and pricing are among the best in the electric vehicle sector.

"If Tesla is right, traditional carmakers are making a mistake by slowing their investment (in EVs)."

TSLA Price Action: Telsa shares are down 1% to $236.65 on Monday, versus a 52-week trading range of $101.81 to $299.29.

Read Next: If You Invested $1,000 In Tesla Stock When The Cybertruck Was Unveiled, Here’s How Much You’d Have Today

Photo: Shutterstock and Tesla