TSLA vs Cybertruck expectations

[SpaceYooper]

CT being the cause of Tesla’s death does not mean it will be a bad truck, it just means at least initially it won’t be profitable. In fact, you could even take it as it will be so good AND so affordable, it will be hard to make profit out of it. If that is the case, since you are not worried about the stock price, you should be fine.

I don't think the truck will be bad at all. But I do agree with @ED_SFO comment about the stock being more subject to a storyline then the bottom line.

Based on most of the responses here being related to the stock price, it seems like the point of my post was not made very clear. I don't really care what happens to the stock price. But I'm curious WHY it is happening.
So my question is; Is it happening because as we get closer to the debut of the most anticipated vehicle to hit the market...maybe ever, do the majority of investors now assume the CT is going to fail to deliver on the expectations created by Tesla? I do think that answer answer is yes. The stock has turned down because people still view TSLA as an auto stock. And because they view it as an auto stock and because they don't think the CT will meet the expectations previously laid out by Tesla, they are selling in mass.

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[intimidator]

I have no intention of selling any stock in the next 20 yrs.

Even before the Q3 earning call TSLA stock was down almost 17+% off it's previous high and since Elon's, "we dug our own grave" comments the stock is down another 19%.
Jul 18 - $293
Oct 18 (Q3 Earning report) - $242
Today (as of this post) - $196

Does anyone else think this has to do with range and price expectations for the CT launch the end of next month? Meaning they will debut something that has the range and pricing that looks a lot like what is already available, and that is not what the retail and even corporate investing wants to see to support the previous TSLA price.

The stock slide is due to the buzz in the EV world that EVs are NOT selling at a faster and faster clip - as everyone hoped/assumed.

It appears we have sorta plateau-ed after all the early adopters bought their EVs. Partly due to price and partly due to high interest rates on loans to buy an EV.

We will have to see what the actually sales are in the 4th quarter, not only for Tesla, but VW, Hyundai, Ford, etc. It will indicate what the growth curve looks like and investors will react accordingly.

PS Today, 90% of all new cars sold in the United States will be gas ICE vehicles. 90%. Tomorrow, 90% of vehicles will be ICE. There are a lot of people to still be convinced to switch to an EV.

 

[Diehard]

I don't think the truck will be bad at all. But I do agree with @ED_SFO comment about the stock being more subject to a storyline then the bottom line.

Based on most of the responses here being related to the stock price, it seems like the point of my post was not made very clear. I don't really care what happens to the stock price. But I'm curious WHY it is happening.
So my question is; Is it happening because as we get closer to the debut of the most anticipated vehicle to hit the market...maybe ever, do the majority of investors now assume the CT is going to fail to deliver on the expectations created by Tesla? I do think that answer answer is yes. The stock has turned down because people still view TSLA as an auto stock. And because they view it as an auto stock and because they don't think the CT will meet the expectations previously laid out by Tesla, they are selling in mass.

Panasonic has warned the cool down in EV interest has impact on their production. Tesla had series of price cuts to boost sale (less margin). Interest rates have been going up and BEVs are expensive (bad combo for sale). Short sellers have been making money,...... there is a lot more going on than CT.

 

[jerhenderson]

The stock slide is due to the buzz in the EV world that EVs are NOT selling at a faster and faster clip - as everyone hoped/assumed.

It appears we have sorta plateau-ed after all the early adopters bought their EVs. Partly due to price and partly due to high interest rates on loans to buy an EV.

We will have to see what the actually sales are in the 4th quarter, not only for Tesla, but VW, Hyundai, Ford, etc. It will indicate what the growth curve looks like and investors will react accordingly.

PS Today, 90% of all new cars sold in the United States will be gas ICE vehicles. 90%. Tomorrow, 90% of vehicles will be ICE. There are a lot of people to still be convinced to switch to an EV.

that's what is so dumb about the Tesla stock dip. it fell because VW and Ford are trimming EV plans? that has NO bearing on Tesla, and yet the stock took a bit.

 

[intimidator]

that's what is so dumb about the Tesla stock dip. it fell because VW and Ford are trimming EV plans? that has NO bearing on Tesla, and yet the stock took a bit.

The stock market, and individual stocks, don't always track a linear path.

IMO we will have to see 4th quarter sales by Tesla AND 1st quarter 2024 to establish the trend.

Tesla is going to out sell the others, but if the general public is trimming their plans to buy big purchases like automobiles, that will depress TSLA stock for awhile. Maybe 6-9 months or so.

 

[davelloydbrown]

Panasonic has warned the cool down in EV interest has impact on their production. Tesla had series of price cuts to boost sale (less margin). Interest rates have been going up and BEVs are expensive (bad combo for sale). Short sellers have been making money,...... there is a lot more going on than CT.

The drop in tesla because of the news from panasonic doesn't make any sense. Because of the inflation reduction act, tesla will import very few batteries from Japan or anywhere else and concentrate on batteries made in the US or a country that they have a trade agreement with.

 

[RVAC]

do the majority of investors now assume the CT is going to fail to deliver on the expectations created by Tesla? I do think that answer answer is yes.[...] and because they view it as an auto stock and because they don't think the CT will meet the expectations previously laid out by Tesla, they are selling in mass.

No, I don't believe that is priced in yet. You'll mostly see it after the event, unless something leaks. The sell off is mainly due to macro and the realization there is not going to be significant growth in vehicle volumes for 2024.

 

[Mini2nut]

I think we will see additional price cuts on all Tesla models soon. Another $69,420 Model S soon? December and January are typically slow months for new car sales.

We also have the Osborne effect with a new and improved Model 3 and maybe a revamped Model Y hitting the streets in 2024.

 

[Diehard]

The drop in tesla because of the news from panasonic doesn't make any sense. Because of the inflation reduction act, tesla will import very few batteries from Japan or anywhere else and concentrate on batteries made in the US or a country that they have a trade agreement with.

I brought that up as an indication that globally BEV adoption is not growing as fast as it used to. TESLA sells outside U.S. as well.

 

[intimidator]

Talking the US. The US.
Consumers in the US are a lot different that Europeans when it comes to EVs.
Today, Halloween, in the US 90% of the vehicles sold will be ICE. 90%.
Long ways to go to change many folks minds.

Signed, All in on owning EVs for 4 years now.....

 

[HaulingAss]

Look at those words. Significant positive cash flow contributor. He's not saying there won't be ANY profit. It could be profitable. Just not what Elon considers significant. So don't go blowing up the value of Tesla stock because the Cybertruck is finally being produced and sold to limited customers.

The real meaning of Elon's words go far beyond the fact that he used the word "significant". That's up for interpretation as to what's significant. What really matters here is the use of the words "cash flow positive" vs. simply saying reaching Cybertruck "profitability". There is a huge difference.

It's a fair guess to say Tesla has spent at least two billion dollars on Cybertruck so far, once you include all R&D, design work, prototyping and testing, the reveal event, supply chain research, materials testing, development of new systems like the 48V architecture, the battery, four-wheel steering, the metal glass, etc. (almost everything in Cybertruck is Cybertruck specific) the construction of the factory for Cybertruck production, the equipping of that factory with dies and robots, the largest Gigapresses ever built, and all other equipment, building the disposable engineering prototypes, flying them to New Zealand for winter testing, also Alaska, crash testing them, re-engineering them, etc. etc. etc.

To hit profitability, all those expenses can be cost over the expected lifetime of Cybertruck production which is certainly over a few million units. On the other hand, Tesla must pay off all those development and factory and equipment expenses in full, using profits from Cybertruck sales, before Cybertruck becomes a positive contributor to cash flow.

This means cash-flow positive is a much higher bar than simple unit profitability. Cybertruck could become profitable in 3 months (not that I think it will be that soon) and still not reach cash flow positive for years. It all depends upon how profitable each sale is and how quickly they can ramp production. If profitability per unit turns out to be only $200, it could take over ten million units to become cash flow positive. If profitabity per unit is $5-7K, Tesla could become cash flow positive after less than 500,000 units.

As you can see, profitablity and becoming overall cash flow positive are two very different things. Cybertruck can be adding to quarterly earnings in a significant manner well before it becomes cash flow positive. That's because much of the expense of developing Cybertruck is behind us (in addition to the fact that many of those expenses can be cost over the expected unit volumes in the future).

 

[HaulingAss]

From watching the stock for years. The stock reflects more of how the social storyline is vs actual numbers. If the stock was just based strictly on numbers then not sure why the stock tanks at all, because the numbers are amazing. But if Elon farts then the stock takes a nose dive. If he's caught drinking regular coca-cola vs diet, the stock tanks. Unless your a very early investor, I wouldn't touch Tesla stock because of the volatility based on the random ass shit Elon does.

I would put your last statement differently:

Unless you have a long-term investment perspective, I wouldn't buy TSLA. It is literally impossible to guess the timing of the swings of a company growing as quickly, and having as much blue sky, as Tesla. Long-term investors will do very well, over a 3-6 year (and more) time horizon.

 

[davelloydbrown]

I brought that up as an indication that globally BEV adoption is not growing as fast as it used to. TESLA sells outside U.S. as well.

there was also an indication that panasonic sales to tesla are fine, it is the sales to other ev manufacturers that are dropping

 

[IronStation]

The drop in tesla because of the news from panasonic doesn't make any sense. Because of the inflation reduction act, tesla will import very few batteries from Japan or anywhere else and concentrate on batteries made in the US or a country that they have a trade agreement with.

If I am not mistaken, they were speaking to the 18650's that go in the S/X and their guidance for US production will be increased investment and growth in cell production for our market.

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