Tesla fans are eagerly awaiting this years arrival of the iconoclastic Cybertruck, but the party may turn out to be a dud for the carmakers shareholders.
Elon Musk turned headsand some stomachswhen he first unveiled the concept in November 2019, later defending its avant-garde styling as something that looked as if it was made by aliens from the future.
But skepticism has since been replaced by anticipation amid reports alleging enthusiastic customers have placed deposits for more than 1.5 million units before so much as test-driving the vehicle.
It would be Teslas first new passenger car since its best-selling Model Y crossover debuted in 2020.
In a research note provocatively asking whether Tesla has since outgrown the model, Morgan Stanley presents the thesis that financially the pick-up could end up as a side-show to the core equity storya halo product that shapes perceptions and builds the brand but not one that is relevant in terms of overall volumes.
We feel the Cybertruck carries more value in a cultural/zeitgeist sense than in a direct economic sense, it argued on Thursday, estimating volumes would be closer to 50,000 vehicles annually and mainly poach customers that buy high-end trucks like the Ford F-150 Raptor.
The argument is controversial in and of itself, given the investment bank admits its own clients reckon the truck will sell in the hundreds of thousands annually.
But it is that much more surprising given analyst Adam Jonas is a card-carrying Tesla bull, who if anything would be likely to talk up the vehicles potential to the stocks price than pour cold water all over it.
Jonas talks down Teslas opportunity with the Cybertruck$TSLA pic.twitter.com/aUgRoft2F5
JC Oviedo (@JCOviedo6) March 9, 2023
Morgan Stanley aims to manage overly exuberant volume expectations
While the design has grown on people over time, the Cybertruck does have one disadvantage that could prove problematic after the first wave of vehicles are delivered: they all come out of the Texas factory looking identical.
Teslas, by and large, are not known for their customization options ex-factory: the Model Y comes in just five exterior colorswhite, blue, black, red and silver.
Since the Cybertruck features a stainless steel body, though, it cannot be painted. At best customers will have to use vinyl wraps to customize their vehicles.
We encourage readers to ask themselves: how many Cybertrucks can roll up to a parent-teacher conference or youth soccer match at the same time before losing some of that indescribable something?, the bank asked, saying it was attempting to manage expectations among institutional investors.
Tesla has said it expects to start series production sometime in the course of this year.
Price and trim levels have not been divulged ever since the company removed the original specifications from its site more than a year ago.
Notably, Musk himself didnt rule out the idea the model may disappoint.
To be frank, there is always some chance that Cybertruck will flop, because it is so unlike anything else, he wrote in July 2021. I dont care. I love it so much even if others dont.
Fortunes CFO Daily newsletter is the must-read analysis every finance professional needs to get ahead. Sign up today.
