Tesla has other worries besides the Cybertruck’s arrival

Tesla remains the most powerful player in the electric vehicle space, but investors are getting antsy as they await new EVs from the company.

Why it matters: The automaker reported higher third-quarter net income and revenue on Wednesday, but it fell short of expectations as price cuts and increased investments offset increased vehicle sales.

• Sales of its Models 3 and Y crossover remain strong, but the long-awaited Cybertruck still hasn’t been released — and a cheaper EV looks far off.

Zoom in: Elon Musk said on Wednesday’s conference call that “we want to just get a sense for the global economy before we go full tilt on the Mexico factory,” adding that he’s concerned about the impact of high interest rates on vehicle sales.

• That facility is expected to make what analysts have called the Model 2, Tesla’s most affordable vehicle yet.
• Slow-walking the Mexico factory “appears inconsistent with Musk’s repeated commentary that affordability is currently Tesla’s biggest challenge,” Bernstein analyst A.M. (Toni) Sacconaghi Jr. wrote Thursday in a research note.

Musk declined to provide a timeline on when the Model 2 would arrive, but he acknowledged that it won’t have all the Cybertruck’s bells and whistles.

• “It will be cool, but it’s utilitarian,” Musk said, adding that it won’t “fill you with awe and magic” but “it can get you from A to B.”

The impact: Tesla stock dived by over 10% Thursday afternoon.

What’s next: The Cybertruck will make its debut at an event Nov. 30, about two years after the company said it would be delivered when a prototype was unveiled in late 2019.

• But the Cybertruck is expected to serve a niche audience, and Musk said the company won’t reach full production capacity on the vehicle until 2025.
• “I do want to emphasize that there will be enormous challenges in reaching volume production with the Cybertruck and then in making the Cybertruck cash flow positive,” Musk said, though he added that “demand is off the charts.”

Be smart: To ramp up to similar sales as the world’s biggest automakers, Tesla will need more model types for a buying public that’s used to a wide variety of choices, including large SUVs and more conventional pickups.