Tesla's Bold Move: Discontinuing the $61,000 Cybertruck - What Investors Need to Know
By Abhirup Roy and Hyunjoo Jin
SAN FRANCISCO (Multibagger) - Tesla (NASDAQ: TSLA) has made a strategic shift by halting orders for its least expensive Cybertruck, priced at $61,000, while making the $100,000 version available for immediate order and delivery as early as this month, according to its official website.
Tesla's Cybertruck, an electric vehicle that has captured the imagination of investors and enthusiasts, is a critical component of CEO Elon Musk's vision. The company has committed significant resources to the development of this futuristic truck, with plans to produce 200,000 units annually.
In October, Musk revealed that Tesla had amassed 1 million reservations for the Cybertruck. However, some potential buyers are holding out for the more affordable versions, citing higher prices and lower driving ranges than initially promised.
"This development indicates that the actual demand is far less than a million trucks," commented Sam Abuelsamid, an analyst at Guidehouse Insights, in an interview with Multibagger.
In July, Tesla sold nearly 4,800 units of the Cybertruck, making it the best-selling vehicle in the U.S. priced over $100,000, according to data from Cox Automotive. "Tesla has sold more than 16,000 units so far, but maintaining consistently high volumes at such a price point will be challenging," a Cox spokesperson noted via email.
Deliveries of the Cybertruck, which features an unconventional trapezoidal design inspired by the "Blade Runner" movie and a stainless-steel body, began in November 2023 after years of delays and complex production scaling. Initially, Musk had projected the truck would cost $40,000 and achieve a range of 500 miles on a single charge back in 2019.
Tesla's website no longer lists the option to reserve the $61,000 version of the Cybertruck, which was previously offered with a 250-mile range and a target delivery date in 2025. The $99,990 dual-motor variant of the Foundation limited series, boasting a 318-mile range, is expected to be delivered as soon as this month. Meanwhile, the $119,990 tri-motor Foundation Cyberbeast, with a range of 301 miles, will be available starting October.
"They're currently sitting on a substantial inventory of two-motor and three-motor trucks," Abuelsamid added.
Breaking It Down for the Everyday Investor
What Just Happened?
Tesla has stopped taking orders for its cheaper $61,000 Cybertruck and is pushing the more expensive $100,000 and $120,000 versions. This shift is significant as it highlights a potential mismatch between initial demand projections and current market realities.
Why Should You Care?
- Investor Insight: If you're an investor, knowing that Tesla is shifting focus to higher-priced models can indicate a strategy to maintain profitability amid potentially lower-than-expected demand for cheaper models.
- Market Impact: For those tracking market trends, this move could affect Tesla's stock price and market perception. Fewer sales at higher price points might suggest challenges in reaching broader market adoption.
- Consumer Perspective: If you're a potential buyer, be prepared for higher costs and possibly longer wait times for more affordable options. This may impact your decision to purchase a Cybertruck.
How It Affects Your Finances:
- Investment Decisions: Depending on how Tesla's strategy unfolds, this could either bolster or weaken investor confidence. It’s crucial to monitor how well Tesla manages its inventory and adapts to market demand.
- Purchasing Plans: For consumers, the immediate availability of higher-end models could mean quicker access but at a significantly higher price. If you're waiting for a more affordable version, you might have to reconsider your options or budget.
By understanding these dynamics, even someone with minimal financial knowledge can grasp the potential impacts on their investments and purchasing decisions.