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To Avoid a Massive Financial Hit, Tesla is Likely to Deliver the First Cybertrucks to Its Employees
To Avoid a Massive Financial Hit, Tesla is Likely to Deliver the First Cybertrucks to Its Employees
Jul 13, 2024 6:03 PM

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

When it rains, it pours. This idiom is doubly true for Tesla, which is not only contending with a persistent sales slowdown but also a full-fledged PR nightmare amid accusations of anti-Semitism against Elon Musk. Amid this turbulent backdrop, it would make sense for Tesla to save every possible dime and opt to deliver Cybertrucks to its employees initially to avoid a sizable financial hit in the ongoing quarter.

Tesla is slated to begin delivering its much-delayed Cybertruck later this month. Ahead of this seminal development, the company has spent quite a lot of time tempering expectations, with Elon Musk himself noting during the third-quarter earnings call that volume production of the electric pickup truck would probably only materialize in 2025.

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The first Cybertruck delivery to a regular customer will trigger around $400M in additional COGS for that quarter. That's -$0.11 EPS. Therefore, it's likely that all deliveries this quarter will be to employees.

The same happened with the Model 3: https://t.co/8NuNnb72Ga pic.twitter.com/MJFueJiLZB

— Troy Teslike (@TroyTeslike) November 17, 2023

Even so, the initial deliveries of the Cybertruck are expected to go to Tesla's own employees. As per an analysis by Troy Teslike, as soon as Tesla makes its first Cybertruck delivery to a regular customer, it would have to recognize $400 million in additional Cost of Goods Sold (COGS), corresponding to an EPS impact of around -$0.11. Naturally, given the multitude of headwinds that the EV giant faces in its ongoing quarter, it would likely seek to avoid this cost recognition by making the initial deliveries to its own employees.

Tesla's Mounting Woes

Meanwhile, Tesla has conceded that it is currently between "two major growth waves." The company has routinely guided that its annual production would grow by 50 percent for the foreseeable future. However, Wall Street currently expects the EV giant to grow its production by 37 percent in 2023 and 22 percent in 2024 in the absence of a sizable Cybertruck-related tailwind.

Hey @CathieDWood… given “Autonomy Day” was 4.5yrs ago, yet $TSLA still ranks last in autonomy (according to @Guidehouse), should one translate this as you’ll be dumping all of your $TSLA stock imminently? H/T - @JCOviedo6 https://t.co/IoqA4riVlx pic.twitter.com/OIF7F9u9tD

— Gordon Johnson (@GordonJohnson19) November 14, 2023

Additionally, as we reported recently, Tesla has just settled an FSD-related lawsuit, opening a whole new can of worms for the EV giant, especially in the UK. This is all the more troubling given that a recent study ranked Tesla's autonomous driving-related efforts at the bottom.

@elonmusk has to stop the anti-Semitic remarks before he damages the $TSLA brand. Two of my Jewish clients reached out to me this morning to express their outrage over his Twitter comments last night. I want to believe the CEO’s attitudes and TSLA brand equity are not linked but…

— Gary Black (@garyblack00) November 16, 2023

Finally, it seems that Elon Musk has opened another front for Tesla by responding in the affirmative to an X post that accused the Jewish communities of pushing "dialectical hatred" against the whites.

On a brighter note, it appears that Tesla's demand woes in China appear to be waning, given renewed expectations of a price increase as soon as next week.

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