Tesla’s (NASDAQ:TSLA) much-anticipated Cybertruck fell short of expectations in its first full year of production, with only 35,000 to 40,000 units delivered for 2024, including 15,000 in the fourth quarter. As a result, the company’s shares dropped around 6% yesterday. This starkly contrasts with the company’s earlier claims of 2 million orders, leading Bernstein analysts to question the vehicle’s viability and profitability.
The Cybertruck, according to analysts, has yet to become gross margin positive. Its limited demand and high production costs raise concerns about its future as a sustainable product. Bernstein described the vehicle as a significant strategic error, noting that its four-year development diverted Tesla’s focus from creating a more affordable model, which the company now urgently needs to remain competitive.
Tesla’s broader financial performance also paints a challenging picture. Amid aggressive price cuts and financing incentives in the fourth quarter, the company’s auto gross margins are predicted to dip below 15% when excluding regulatory credits and one-time software revenue. This margin falls behind nearly all major U.S. and European internal combustion engine manufacturers, with Ford being the sole exception.
Bernstein projects Tesla’s annual earnings to decline from $2.60 per share in 2023 to approximately $2.10 in 2024, even factoring in an additional $1 billion in regulatory credits. These figures reflect mounting pressure on Tesla’s profitability amid fierce competition and increasing costs.
In the autonomy space, Tesla’s push toward robotaxis has also drawn skepticism. Bernstein analysts expressed doubts about Tesla’s ability to outpace rivals like Waymo, citing its more limited sensor technology, regulatory challenges, and a smaller edge in accident simulation training. Even if Tesla achieves Level 5 autonomy first, its ability to maintain dominance in the space remains uncertain.