After much delay, Tesla (NASDAQ:TSLA) has finally commenced the production of its Cybertruck electric pickup at its Gigafactory in Austin, Texas, the company tweeted on Saturday. The news comes ahead of the electric vehicle (EV) maker’s second-quarter results scheduled to be announced on July 19. Investors would expect the company to provide further details on the specifications and production of Cybertruck at the Q2 earnings call.
The Much Awaited Cybertruck
Tesla CEO Elon Musk unveiled the Cybertruck in late 2019 at an event in Los Angeles, although with an embarrassing moment. Musk claimed that the Cybertruck was bulletproof but when the head of design threw a metal ball at the side window to demonstrate the model’s toughness, the window cracked.
Telsa had initially planned to start production of the Cybertruck in 2021. However, the company delayed production, citing shortages in sourcing components. During the Q1 earnings call in April 2023, Musk said that the company is continuing to build “Alpha versions” of the Cybertruck on its pilot line for testing purposes. He also added that the company plans to have a “great delivery event” likely in the third quarter.
At the May 2023 annual shareholder meeting, Musk said that the company expects to sell between 250,000 and 500,000 Cybertrucks once the production is ramped up based on the demand for the model.
Meanwhile, several EV rivals have launched electric pickups since the Cybertruck was unveiled. The Cybertruck will be competing with Ford’s (NYSE:F) F-150 Lightning pickup, Rivian’s (NASDAQ:RIVN) R1T pickup, and General Motors’ (NYSE:GM) Chevrolet Silverado EV and GMC Hummer.
Is Tesla a Good Stock to Buy Now?
Wall Street is sidelined on Tesla stock, with a Hold consensus rating based on 12 Buys, 13 Holds, and five Sells. The average price target of $237.50 implies a possible downside of 15.6%. Shares have rallied more than 128% year-to-date.
Last week, Citigroup analyst Itay Michaeli said that the sentiment is “neutral-to-slightly negative” heading into Tesla’s Q2 results. The analyst cautioned that the stock’s stretched valuation makes it vulnerable, with unimpressive numbers or below-than-anticipated margins possibly impacting investor sentiment.
However, Michaeli noted that consensus estimates for the year don’t seem aggressive and the better-than-anticipated Q2 delivery report provides scope for an upward guidance revision. The analyst does not see the need for de-rating the stock in the absence of any impending downward revisions to the estimates. In line with his investment thesis, Michaeli boosted his price target for Tesla to $278 from $215 but maintained a Hold rating.
