Elon Musk is finally ready to give up on the Cybertruck, and Tesla's pivot this time is quite sharp.
An electric pickup truck that was once highly anticipated may be phased out earlier than expected.
Musk announced plans to gradually end Cybertruck production at the Texas factory by mid-2027, freeing up capacity to produce more Cybercabs.
This vehicle initially had a target of 250,000 units sold annually, but by 2025, U.S. sales are only about 20,000, which is quite a big gap.
However, the market reaction is somewhat subtle. Tesla plunged 10.77% on Thursday but rebounded about 4.2% on Friday, closing near $358.
I think Musk's adjustment this time isn't necessarily a bad thing. It's better to shift resources early to businesses with growth potential than to let unsellable models continue occupying production capacity.
The question is, can the Cybercab pick up the slack?
Tesla's Q3 revenue was about $28 billion, but operating profit dropped 56% year-over-year. The profitability pressure on the automotive business is clear, and continuous investment in autonomous driving is still needed.
The Cybertruck is at least a vehicle that can be sold to consumers. There are still many question marks about how many cities the Cybercab can operate in and whether it can achieve scalable profitability in the future.
I understand the market is willing to pay a premium for Tesla's autonomous driving story, but it's time to deliver more concrete operational data.
If the Cybercab doesn't scale up in the next two years, do you think Tesla's current valuation can hold up?
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