Electric vehicle giant Tesla (TSLA) recently had a bit of a reversal as demand numbers for its Cybertruck emerged. The demand was not what anyone would call “brisk.” In fact, demand was already modest and has been falling substantially. Shareholders were concerned, and sold off some of their holdings, sending Tesla shares down fractionally in Thursday afternoon’s trading.
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A report from Cox Automotive told the tale: the second-quarter sales of Cybertrucks dropped to just 4,300 vehicles, a drop of 51% against the second quarter of 2024. This is a massive and crippling plunge from the reports in December 2023, where Franz von Holzhausen, Tesla’s design lead, noted that the company had deposits sufficient for two million orders, which would require Tesla work for 16 years to fill.
Apparently, a lot of people regretted that deposit, thanks to a combination of high price, quality issues, and likely an economic shift thrown in there for at least some orders. This means that Tesla’s odds of ever beating its current quarterly sales record of 39,000 Cybertrucks is fairly unlikely at this point. The eight recalls staged on the Cybertruck on the 2024 model year releases and a pair of investigations from United States traffic safety officials only made a bad situation worse for Tesla.
Autopilot “Misuse”
Worse for Tesla, a trial regarding a fatal collision back in 2019 is not going well either. George Mason University engineering professor Mary “Missy” Cummings testified during that trial that the Tesla owner’s manual is “…difficult for drivers to access.” This means that several key warnings about how its Autopilot system works are going unread.
But even without that, the Autopilot system is not all it is cracked up to be, Cummings noted. Even before the crash, issues of drivers ignoring warnings were prevalent. And the system did not help, eschewing geofencing systems that many other car makers were turning to routinely in order to prevent many common cases of misuse.
Is Tesla a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 13 Buys, 13 Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. After a 29.07% rally in its share price over the past year, the average TSLA price target of $298.97 per share implies 6.98% downside risk.
