Enthusiasts of Tesla, Inc.'s (TSLA) Cybertruck will have to wait longer to get their hands on the vehicle. According to reports, the company is planning to start production of the truck only in 2022. During an unveiling of the vehicle back in 2019, it had promised delivery toward the end of 2021.
- Tesla has delayed production of its Cybertruck, initially scheduled by end of 2021, to 2022.
- Possible reasons for the delay are Model Y production priorities and manufacturing difficulties in implementing its design.
- The electric vehicle will enter a crowded market, consisting of vehicles made by startups and established companies alike.
- Tesla also received a ratings upgrade from an analyst.
Tesla has encountered many design and supply chain issues. For example, Tesla CEO Elon Musk warned in January that new manufacturing processes for the truck's steel exoskeleton could delay its delivery. Microchip and raw material shortages due to the pandemic have also interfered with the company's planning for its new facility in Austin, Texas. Production on the Cybertruck was slated to begin earlier this year at Tesla's Austin facility, but CEO Musk has indicated that Model Y production will take precedence over the Cybertruck's manufacturing after the facility is completed.
The Cybertruck had a high-profile launch in 2019, when its futuristic and brutalist look of sharp and angular lines polarized public opinion. It also generated headlines after the company's chief designer Franz von Holzhausen shattered its window glass with a steel ball. A few moments earlier, CEO Musk had bragged about the vehicle's "bulletproof" glass.
The Cybertruck postponement is not much of a surprise to those who follow the company. Tesla has been hinting at a delay for several months now. Besides, it has a history of missed deadlines, and its ambitious agenda is littered with misses and mistakes in its manufacturing schedules. CEO Musk also hinted at a possible failure for the truck earlier this year.
A Crowded Market
When it is launched, the Cybertruck will enter a crowded market. Ford Motor Company (F) plans to launch an all-electric version of its best-seller Ford F-150 by Spring 2022. General Motors Company (GM) has started work on an electric version of its Chevy Silverado and has scheduled a launch in 2024. The Ram 1500 will also launch in the same year. Electric truck startups are also snipping at Tesla's heels. Rivian, a Michigan-based electric startup, is planning to launch its electric truck in September this year.
According to Tesla, it has received over 1 million reservations for the Cybertruck since its launch announcement. It should be noted, however, that reservations do not always translate to a sale since the amount reserved to book a Tesla Cybertruck is a nominal $100 and is completely refundable.
A Ratings Upgrade
Meanwhile, Jefferies analyst Philippe Houchois has upgraded his rating of the Tesla stock to Buy from Hold. He also increased his price target on Tesla stock to $850 from $700, writing that the company will benefit from rising global battery electric vehicle (BEV) demand, as well as more battery and assembly capacity.
He said that corrections in Tesla's stock, which is down by almost 20% from its January peak, occurred because the market adjusted its initially enthusiastic expectations for the company's business, including deliveries and growth in its storage business, which were inflated. But the company's "product complexity, inventories, direct selling and initiatives in selling subscription services" were reasons to be bullish about the stock.