This isn’t funding recommendation. The writer has no place in any of the shares talked about. Wccftech.com has a disclosure and ethics coverage.
Tesla bulls have adopted the soon-to-launch Cybertruck because the all-encompassing panacea for the EV large’s demand-related woes, hoping that the so-called halo impact from the launch of the electrical pickup truck interprets into higher model visibility and quantity progress for different Tesla fashions. Nonetheless, this bullish thesis seems to be enmeshed with lofty expectations which might be solely tenuously related to floor realities.
What $TSLA IR was telling EU buyers about Cybertruck 9/6:
-Solely 250K/yr in “goal” capability
-Will primarily promote within the US
-Problem with 4680 cells & chrome steel$TSLA has horrible yields on their in-house 4680s (see 10-Qs) & can solely produce sufficient for 3K CTs/month. pic.twitter.com/ENt4A30gLf
— Motorhead (@BradMunchen) September 27, 2023
Tesla briefed a few of its key European buyers on the Cybertruck’s prospects in early September. Quantity manufacturing of the brand new electrical pickup truck is anticipated in 2024, with Tesla focusing on an annual capability of 250,000 items. Nonetheless, there are a number of main bottlenecks that hamper this lofty goal. First, with the Cybertrucks wholly counting on Tesla’s in-house 4680 battery cells, the EV large can solely cater to a manufacturing degree of round 3,000 items monthly, given the present less-than-stellar yields on these cells. In different Cybertruck-specific adjustments, Tesla will use a 48-volt structure for the interior electronics in addition to a 1000-volt structure for the powertrain. All of those adjustments complicate the manufacturing ramp-up of the electrical pickup truck.
Even when Tesla manages to hit its peak manufacturing goal of 250,000 items per yr, it’s as but unclear whether or not ample demand would materialize for these considerably quixotically-shaped automobiles. Take into account a latest survey the place simply 27 p.c of respondents conveyed their desire for the Cybertruck.
DB with a fairly neg notice on $TSLA regardless of their Purchase ranking: Q3 deliveries will 440k down from earlier estimate 455k (avenue at 453k). Worse, they “see a bigger threat to expectations for 2024 on each progress and earnings as TSLA indicated just lately at our DB IAA conferences that it’s…
— heartbreakout (@heartbreakout) September 26, 2023
It’s hardly a shock, due to this fact, that Deutsche Financial institution has now lower its 2024 supply estimate for Tesla to 2.1 million automobiles versus the consensus estimate of 2.3 million items. The financial institution’s 2024 supply outlook solely features a “minor contribution” from the Cybertruck. Within the close to time period, the financial institution now sees Tesla delivering 440,000 items in Q3 2023, down from its earlier estimate of 455,000 items. Accordingly, the financial institution now estimates that Tesla will report $23.3 billion in income for the third quarter of 2023.
We famous yesterday that Wall Road is scrambling to scale back its elevated supply estimates for Tesla simply forward of the official reporting on the flip of the month. With the halo impact from Cybertrucks doubtless failing to materialize within the close to time period, the dangers to the EV large’s elevated inventory value stay fairly important.