When it comes to Tesla's (TSLA 5.42%) first-quarter earnings report, many investors are likely focusing on the company's big year-over-year decline in profit. Caused primarily by the electric car maker's aggressive price cuts, Tesla's 24% year-over-year decrease in net income is certainly concerning. After all, the growth stock trades at a pricey valuation because investors are pricing in forecasts for strong earnings growth for years to come. But there's arguably even bigger news in the update than Tesla's earnings decline: the company's all-electric pickup truck is finally nearing its launch.
A truck will not only represent a new vehicle for Tesla, but it will also give the company a new vehicle type. For now, Tesla only sells sedans, SUVs, and semitrucks. This will put the company in the pickup truck market for the first time. Of course, the pickup truck market is extremely big and lucrative in the U.S. The Cybertruck, therefore, will likely be a major catalyst for Tesla's business.
NASDAQ: TSLA
Key Data Points
Launching this year
During Tesla's first-quarter earnings call, CEO Elon Musk said he is hoping the vehicle will launch sometime around the end of the third quarter. Tesla hopes to debut the production version of the vehicle at a launch event. This event, the CEO said, will represent the start of deliveries of the new vehicle.
A tentative timeline for a delivery event for Tesla's Cybertruck comes as Tesla says it's on track with its plans for tooling its factory in Texas for Cybertruck production. Indeed, the tooling has progressed enough that Tesla is now building alpha, or final pre-production, versions of the vehicle.
Details are scant on Tesla's Cybertruck, with its futuristic and unique design. But the company has revealed some specifications. It will boast an acceleration from zero to 60 mph of just 2.9 seconds. In addition, at least one version of the truck will get up to 500 miles of range, according to Tesla's website.
While Musk refrained from providing any updates on pricing and specifications during Tesla's earnings call, he did say that "[A] product like this only comes once in a long while, so you will not be disappointed at all. It's amazing."
Sales won't be significant until next year
Tesla management also used the earnings call to remind investors that delivery volumes for the truck will be low early on.
"As with all new products, it will follow an S curve, so production starts out slow and then accelerates," explained Musk. "So the Cybertruck is no different."
Based on Tesla's previous product launches, investors shouldn't expect any significant volume in deliveries until 2024. But when deliveries do ramp up, the Cybertruck is likely to become a meaningful contributor to sales. There's a "tremendous amount of demand for the product," Musk said during the earnings call. Back when Tesla was commenting on the number of preorders it was getting for the product, Musk had said they exceeded half a million.
Unlike some previous product launches, Tesla has plenty of cash to fund a ramp-up in the production of a new vehicle. Tesla wrapped up its first quarter with $22.4 billion in cash, cash equivalents, and investments. Even more, the company's business generates positive free cash flow. With a strong balance sheet, robust cash flow, factory tooling on track, and alpha models already being built, Tesla will likely follow through with its latest plans for the vehicle and finally bring the long-awaited Cybertruck to market later this year.
