Tesla (NASDAQ:TSLA) has recently changed its Cybertruck lineup significantly, discontinuing orders for its cheapest model and raising prices on remaining variants.
The move comes as the electric vehicle maker adjusts its strategy in the highly competitive pickup truck market. Meanwhile, despite its strong long-term performance, Tesla’s stock continues to face challenges in 2024.
Tesla Increases Base Price for the Cybertruck
Tesla has ceased taking orders for the $61,000 base model Cybertruck, instead prioritizing the $100,000 version for immediate delivery.
The company has removed the least expensive option from its website and significantly increased prices for remaining models. The dual-motor all-wheel drive variant now starts at $99,990, up from $79,990, while the tri-motor “Cyberbeast” variant has increased to $119,990 from $99,990.
These prices represent a substantial jump from the originally projected 2019 starting price of $39,990, with current pricing $39,000 to $60,000 higher than initial estimates.
The pricing shift suggests that Tesla may be facing lower demand than the initially projected 1 million reservations. By focusing on higher-margin models, the company appears to be prioritizing profitability over mass-market accessibility.
This strategy could impact Tesla’s ability to reach a broader customer base with the Cybertruck, a key product in its expansion into the pickup truck market.
Despite these changes, Tesla still plans to produce 200,000 Cybertrucks annually, underscoring the vehicle’s importance in the company’s product mix.
Tesla Stock Down, Faces Significant Volatility
As of 10:11 AM EDT on the day of reporting, Tesla’s stock was trading at $196.51, down $3.49 or 1.75% from the previous close. The company’s market capitalization stood at $627.72 billion, with a price-to-earnings ratio of 56.18 and earnings per share of $3.56.
Tesla’s stock has shown significant volatility, with a beta of 2.01 and an average daily trading volume of 119,771,466 shares.
While Tesla’s stock has delivered an impressive five-year return of 1,154.15%, significantly outperforming the S&P 500’s 83.18% gain over the same period, its recent performance has been less stellar. The stock’s year-to-date return of -20.92% and a one-year return of -19.02% both trail the S&P 500’s performance.
Despite these challenges, Tesla maintains a strong financial position with $30.72 billion in cash and a profit margin of 13.00%.
Investors will be closely watching Tesla’s next earnings report, expected between October 17 and October 21, 2024, for insights into the company’s future prospects and the impact of its Cybertruck strategy.
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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.
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