Tesla’s (NASDAQ:TSLA) CEO Elon Musk warned about production challenges related to the company’s much-awaited electric pickup, Cybertruck, during a post-earnings call on Wednesday. Musk said that the volume ramp-up of Cybertruck has its own challenges and that the venture could turn cash flow positive only in 2025. Meanwhile, the billionaire stamped November 30 as the date for the first deliveries of the fancy truck, following consistent delays nearly four years after its initial look was unveiled in 2019.
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Musk also noted that the company expects to make roughly 250,000 Cybertrucks annually by 2025. Currently, Tesla has the capacity to manufacture 125,000 units. The Cybertruck is being manufactured at Tesla’s Gigafactory in Austin.
The pricing of the pickup truck is expected to be announced at an event on November 30, along with the initial deliveries. Since its launch, prices of raw materials and the general inflationary pressures have pumped up production costs. It remains to be seen how Musk strategically positions the Cybertruck as it sets to compete with Rivian’s (NASDAQ:RIVN) R1T and Ford’s (NYSE:F) F-150 Lightning pickup trucks.
The electric vehicle (EV) giant missed sales and earnings estimates for the third quarter of Fiscal 2023 results, dragging down shares by 4.2% in Wednesday’s extended trading. Even Tesla’s margin compression was partly attributed to increased operating expenses on the Cybertruck alongside the rapid price cuts on its EVs.
Is Tesla a Good Stock to Buy 2023?
On TipRanks, Tesla stock has a Hold consensus rating based on 11 Buys, 14 Holds, and four Sell ratings. The average Tesla price target of $255.67 implies 5.4% upside potential from current levels. At the same time, TSLA stock has zoomed 124.5% so far this year.
