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Well, it’s finally here. Kind of. Tesla’s PS1-Vector-style Memetruck is available to order in its most basic form for $60,990 (that price won’t arrive until 2025 at the earliest and includes optional extras. Paint, floor mats and a ladder)
Thursday’s release of the cyberdrug prompted another flurry of media stories about cyberdrugs. In November, Factiva recorded 1,072 private messages in the English-language press worldwide, making it the third cybertruck month of the year to date:
10,931 cyberdrug stories in 11 months from 2023. . . . How many cybertrucks exactly? Here’s what Morgan Stanley expects.
We forecast 50 deliveries in FY23, 30,000 units in FY24 and 78,000 units in FY25. Our ATP assumption starts at $90k and will decrease to $84k by 2025. Later in the decade we expect the ‘Cybertruck’ to be joined by a range of ‘Rivian-looking’ pickups and SUVs with a more practical design language. Tesla.
Yes. fifty. Year-to-date, 218.62 stories per truck may Will be given.
Based on the current flow rate, that rate could drop to 0.4 new stories per truck in 2024, though Tesla’s track record of meeting expectations puts some wide error bars around that estimate.
We are masked for a reason. It’s not just the economics that are driving people crazy, but the value Tesla gets from creating different-looking innovations. It’s no economy, even with a starting price that’s 56 percent higher than the 2019 announced price. Morgan Stanley again:
By 2025, we predict that cyberdrug will account for less than 5% of Tesla revenue and less than 0% of profit. Part of Tesla’s brand obsession and engineering philosophy involves pursuing various ‘moonshot’ projects that encourage collaborative engineering teams to tackle bold, difficult projects with the goal of improving more mainstream products over time.
and RBC Capital Markets:
This pricing is higher than we expected and supports our view that the conversion rate at 1M+ bookings will be low, less than 20%. However, this shouldn’t be a factor for 2024 as we don’t expect Tesla to deliver a cumulative 200k units until 2025. The base model will be available from 2025, so a starting price of $80k through 2024. We expect this pricing to eventually drop after delivery to early adopters. We think this price compares favorably with other offerings from Rivian and Ford. At only 3% of total Tesla volumes in 2024, we don’t expect Cybertruck to be a margin headwind in 2024, especially given the limited impact of large-scale ramps in China, Texas (Model Y) and Berlin. The Cybertruck is, in our view, a ”halo” product to attract customers to the brand’s core vehicles, the Model 3 and Model Y.
This begs the question, why sell it? Why not leave it as an opinion? A few analysts say Tesla is worth more dead than alive; Nitij Mangal of Jefferies argued earlier this month that scrapping the plan would be “climbing out of self-dug holes.”
1) Cyberdrug “off-mission” – modest incr. Growth, any mfg leverage, and drags on profit/cash (capex guidance raised twice) all suggest Cyberdrug diverts resources from high-volume global segments and offer the Model Y a 4680.
2) Double negative on affordability – higher prices affect all OEMs, but big cuts in new prices dragged residual values c.10 ppts below new, bigger than peers’ drag on affordability. Allocating capital to support remnants would be a better use than cybertruck.
Morgan Stanley’s Adam Jonas suggests that the damage is cut in the middle ground, where the Cybertruck joins other Tesla-badged innovations and is transformed into a very, very limited version:
By Elon Musk’s own admission, the cyberdrug is an extraordinarily difficult product. While we expect the Cybertruck to be produced in significant quantities (yes, you’ll see this truck at tailgates and football practice drop-offs), we believe the company may decide to deliberately limit series production to avoid shortages while focusing company resources on more profitable products. . There are historical precedents for limited production models (Aston Martin produced 645 Lagonda units) and more recent precedents (Ferrari Daytona SP3 only 599 units). Collectors can sell Teslaquila or Boring Company ‘Not a Flamethrower’ bottles for thousands of dollars on eBay.
They can also find plenty of items at Tesla Sales For dozens of dollarsIncluding novelty tequila that retails for (apparently) $420 a bottle.
The thing about the halo effect is that halos don’t really exist. Musk’s problem with Cybertruck is that it does it now.
