This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.

It is indeed a rare occurrence to find Morgan Stanley's resident Tesla permabull, Adam Jonas, walk back his expectations vis-à-vis Tesla's products. After all, this is the same Jonas who thought that Tesla's still-to-be-launched bipedal robot, dubbed the Optimus, would revolutionize manufacturing as we know it. Nonetheless, it seems that Tesla's Cybertruck is not meeting the analyst's expectations.

MORGAN STANLEY: The #cybertruck “may be more of a ‘side-show’ to the $TSLA story .. We think it will more likely be an enthusiast/cult car with far more limited volume (closer to 50k units/year) with some .. learnings that could ultimately migrate to .. Tesla’s core lineup.” pic.twitter.com/ARmOtGfeVk

— Carl Quintanilla (@carlquintanilla) March 9, 2023

In a new investment note, Jonas has pointed out that the Cybertruck is likely to be a mere "side-show," commanding annual volumes of just around 50,000 units. While Jonas conceded that the Cybertruck would be the "ultimate avant-garde vehicle," the analyst believes that the truck carries more value in a "cultural/zeitgeist" sense rather than an economic one. Consequently, as per the permutations conducted by the Morgan Stanley analyst, the Cybertruck is unlikely to exceed the maximum production volume of 100,000 units per annum.

MS doing a polite job at saying the $TSLA Cybertruck is a going to be a flop and won't move the needle. Shocked face!

— Thomas Thornton (@TommyThornton) March 9, 2023

Bear in mind that Cybertruck currently has pre-orders in excess of 1.5 million. Assuming all of these reservations translate into actual orders and based on the production capacity highlighted by Jonas today, it would take Tesla around 15 years just to eliminate its current order backlog.

At its Investor Day 2023, Tesla announced that a new vehicle platform was in the works. This next-gen platform will allow the company to build multiple vehicle models and configurations in standardized factories. Additionally, the company's CFO, Zach Kirkhorn, revealed that Tesla will invest up to six times its already-invested CapEx to prepare for the long-term target of producing 20 million electric vehicles annually by 2030. This means that the company's CapEx requirements over the next few years might total as much as $175 billion. According to Musk, Tesla will retail around 10 models by 2030, with each model capturing sales of around 2 million units per annum.

BERENBERG: Tesla's has "weaponized capacity," enabling it to "price its vehicles to drive volumes." But "valuation now leaves less room for disappointment. With a 2025E P/E of 25x and EV/sales of 4.5x, "we prefer automakers elsewhere .."

Cuts to Hold, $210 $TSLA

— Carl Quintanilla (@carlquintanilla) March 8, 2023

Yesterday, Berenberg cut the rating on Tesla shares from 'buy' to 'hold.' While noting that the company's current strategy of using aggressive price cuts to drive demand is paying off, the investment bank now believes that Tesla's elevated valuation leaves little room for disappointment going forward.

Despite these less-than-stellar developments, AARK Invest's Cathie Wood continues to endorse Tesla with her proverbial checkbook. To wit, ARK Invest bought nearly 70,000 Tesla shares yesterday, bringing the fund's total Tesla holdings to just over $800 million.

Below you will find the entire investment note by Adam Jonas:

2 of 9