As Tesla faces a year of slower growth in 2024, analyst firm Jefferies suggests canceling the delayed Cybertruck could let Tesla “refocus on an edge that was built on simplicity, scale and speed.”
In a note to investors, Jefferies analyst Philippe Houchois cut his price target on Tesla while arguing 2024 already looks to be “a lost year for growth” with Tesla stuck in the slow lane unable to capitalize on rivals’ delays.
With European automakers launching more affordable EVs and Chinese brands accelerating product cycles, Tesla risks losing its competitive advantage without major new products launching soon.
Houchois believes canceling Cybertruck could help Tesla redirect significant resources away from ramping up an complex new vehicle program during an already slow growth period.
Instead, the management focus could shift to shoring up demand for existing high volume models like the Model Y, while accelerating the scaling of 4680 battery cell production. Doubling down on simpler, proven products may bolster sales and margins sooner.
The analyst also suggests using freed up capital to support residuals value on leased vehicles could be a better allocation than investing in the risky, unproven Cybertruck.
While the futuristic pickup generated intense hype and preorders, complexity challenges have already delayed its launch from late 2021 to late 2023. Speculation about further push outs continues.
As Tesla aims to extend its edge in EV technology and cost position against traditional automakers and startups, spending years launching an unfamiliar genre like an angular steel pickup may distract focus.
Though a vocal minority of fans eagerly await Cybertruck, canceling it could streamline Tesla’s product lineup during a transitional period. Resources could flow into the core mass market cars like Model 3 and Model Y instead.
While Jefferies sees risks to Tesla’s near term growth trajectory, it believes longer term pillars around cost position and scaling simplicity remain intact. Canceling Cybertruck may ironically allow Tesla to get back to those fundamentals sooner.