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Elon Musk had a bad week, but he'll probably recover (again)

Elon Musk at Tesla Cybertruck delivery event
Elon Musk at Tesla Cybertruck delivery event

Tesla

  • Elon Musk had a chaotic interview and underwhelming delivery event this past week.
  • Tesla's Cybertruck delivery event should have been his victory lap, but left some fans disappointed.
  • Nonetheless, Musk has a habit of bouncing back, experts said.

Elon Musk is looking to bounce back after a rough week.

The Tesla CEO should have had a slam-dunk with the launch of the long-awaited Cybertruck last week. Instead, as is often the case for the bombastic billionaire, his achievement was somewhat obscured in a whirlwind of controversy and disappointment.

In the weeks leading up to the Cybetruck launch, Musk was dealing with the fallout of a quip on his social media platform X (formerly Twitter) that appeared to endorse an antisemitic post. Investors and longtime defenders turned on Musk, while yet another wave of advertisers abandoned X in the wake of the controversy.

In a public appearance the day before the Cybertruck event, Musk's meandering and profanity-laden chat with Andrew Sorkin at the Dealbook Summit drew even more negative attention for the CEO.

By Thursday, investors and analysts who spoke with Business Insider were relieved to finally see Musk back in his element at the Texas Gigafactory.

The launch of the Cybertruck, details of which had been leaking online for months, was supposed to be a victory lap for Musk. Launch events like these are typically where the billionaire shines: hyping up his outlandish and high-tech electric cars to crowds of adoring Tesla bros.

Cybertruck launch disappoints

Even the most loyal Tesla fans walked away disappointed last week when the Cybertruck failed to deliver on key promises Musk made at the truck's first reveal in 2019 – particularly when it comes to price.

"We were promised an industry-killing machine, and that was not it," Zack Nelson, known by his YouTube account JerryRigEverything, said.

Cybertruck
Tesla has finally started to deliver the first few Cybertrucks in the US.

SUZANNE CORDEIRO/Getty Images

DeutscheBank analyst Emannuel Rosner said the high price of the Cybertruck is likely to create a drag on adoption, predicting a conservative 50,000 trucks delivered in 2024 compared to Tesla's 125,000-unit capacity for the first phase of the launch.

"Cybertruck pricing seems high to us," Rosner wrote in a note to clients. "The vehicle will be a large drag on the cost front and carry negative profitability and free cash flow for the next 18 months."

Elon always bounces back

Even when Musk falls short of expectations (he does this pretty often) he has a fanatic group of followers who help the CEO bounce back from controversy after controversy.

Ivan Drury, an automotive analyst for Edmunds, pointed out that Musk is notorious for overpromising and setting unrealistic timelines, but Tesla continues to have a devoted fan base nonetheless.

"It was just a repeat of every single one of their vehicle launches," Drury said. "Tesla has enough fanfare that as long as he can say it's in production in some shape or form, there will be plenty of people who will be excited for it."

Most analysts still have a rosy view of the Cybertruck's first year of production, with Wedbush analyst Dan Ives predicting the first 10,000-unit quarter for the truck hitting sometime before June 2024.

Brian Moody, executive editor at Autotrader, said he felt the truck was in line with his expectations.

Tesla has a huge fan base.
Elon Musk and Tesla have a large fan base.

Richard Vogel

"It's nothing spectacular, but it has some incredible specs," Moody said, pointing to the vehicle's towing capacity and speed. "Buyers of that truck don't want something traditional and it certainly delivers on that."

Despite Musk's frequent controversies, particularly since he purchased Twitter in late 2022, Tesla's popularity has yet to take a real hit. While competition from legacy car companies has narrowed Tesla's lead this year, the brand remains synonymous with electric cars in the US market.

"There might be less demand than they initially anticipated due to the price and lack of functionality as a work truck," Drury said. "But there will always be those Tesla buyers who have to have it."

Read the original article on Business Insider