Cybertruck Challenges Drag Tesla Shares Down, Impact Chinese EV Makers

Post-Quarter Results Highlight a Mixed Bag for Tesla

The after-hours trading on Wednesday witnessed a minor uptick for Tesla, following their Q3 results that fell slightly short of expectations. Interestingly, this happened despite the company reportedly feeling the pinch in its profit margins. On the downside, there was a visible 6.7% slump in Tesla’s deliveries, largely due to a planned shutdown for factory upgrades. Despite this drawback, the car maker retains an optimistic outlook, targeting an annual delivery of 1.8M vehicles. However, this optimism did not save the company’s stocks from taking a 4.2% tumble after CEO Elon Musk downplayed hopes surrounding the much-anticipated Cybertruck.

Bleak Projections for Cybertruck Production

Elon Musk admitted candidly that Tesla had “dug its own grave with Cybertruck,” underlining difficulties in large-scale production and turning substantial profits with it. According to Musk’s projection, it will take anywhere between 12 to 18 months before this vehicle starts making significant contributions to positive cash flow. The less-than-encouraging comments affected Chinese electric vehicle makers listed in Hong Kong – BYD (OTCPK:BYDDF) and Li Auto (LI) both recorded a 4% dip; XPeng (XPEV) was down by 9%, while Nio (NIO) also saw an 8% drop.

The Industry-wide Struggle with Electric Trucks Reflects Market Realities

Tesla is not alone facing bumps along the road in electric truck market niche. This week, GM postponed the opening of its second electric truck factory situated in Michigan. Meanwhile,Ford also scaled back one of its three shifts at their Michigan plant responsible for the production of F-150 Lightnings, and had previously shelved plans on their EV production targets. Some analysts believe that these setbacks may serve as an opportunity for Rivian Automotive (RIVN) to consolidate its position in the electric truck market. They foresee Tesla’s Cybertruck rivalling Rivian’s R1T, Ford’s F-150 Lightning, and GM’s Chevrolet Silverado EV.

Commentary and Financial Advice

“Musk’s strategy seems to favor volume sales over profit margins, especially with the impending launch of Cybertruck,” Ahan Vashi, a leader from the Investing Group observed. He suggested that long-term investors should hold off for a more opportune time before making bullish moves.” Livy Investment Research linked recent selling-off in Tesla to dwindling confidence in company’s fundamental prospects and cautioned about imminent “limited near-term respite”.