Tesla profits plunge 22% as Elon Musk admits the firm ‘dug its own grave’ with the much-anticipated Cybertruck

Tesla’s profits are down 22 percent – as Elon Musk admitted the company had “dug its own grave” over the rollout of its ambitious Cybertruck.

Revenue for the third quarter of the year was $23.4 billion lower than analyst expectations of $24.09 billion.

Gross profit fell 22 percent year-over-year, causing Tesla shares to tumble about 9 percent to $220 as of Thursday afternoon.

The slump is largely caused by the company’s aggressive price-cutting campaign to compete with its growing group of competitors.

Elon Musk admitted that the company had “digged its own grave” over the rollout of its ambitious Cybertruck

The futuristic pickup was first announced in 2019 and was expected to hit the market in 2021 before being hit with a slew of delays

But during the company’s Q3 call, Musk also addressed Tesla’s struggle to ramp up production of its Cybertruck.

The futuristic pickup was first announced in 2019 and was expected to hit the market in 2021 before being hit with a slew of delays.

Included in comments by Business insider, Musk told investors: “We dug our own grave with the Cybertruck.

‘It is such a special product that you only come across once in a while. And special products that come along every now and then are just extremely difficult to bring to market to achieve volume, to be prosperous.’

First deliveries of the Cybertruck are scheduled for November 30, but Musk warned it could take as long as 18 months for cash flow from the vehicle to be positive.

“I want to emphasize that there will be enormous challenges in achieving volume production with the Cybertruck and then making the Cybertruck cash flow positive – this is just par for the course,” Musk added.

Although Tesla dominates the electric vehicle market, its market share is starting to slow down thanks to strong competition from brands like Ford and Rivian.

Since the truck was first announced, rivals have been catching up with their own versions of electric trucks, such as Rivian’s R1T, Ford F-150 Lightning and General Motors’ Chevrolet Silverado.

Despite chaos turning to chaos, Musk reaffirmed that demand for the truck is “off the charts,” with more than 1 million potential buyers pre-ordering one with a $100 deposit.

Tesla shares tumbled about 9 percent to trade around $220 Thursday afternoon

Tesla faces competition from a growing group of competitors, including Ford. A cab of a model of the all-new F-150 Lightning electric pickup is seen on an assembly line at the Ford Rouge Electric Vehicle Center in Dearborn, Michigan, U.S., April 26, 2022

Across the board, Tesla’s year-over-year sales growth was the weakest since the pandemic struck in the second quarter of 2020.

Overall, the company reported second-quarter revenue of $23.4 billion, below analyst expectations of about $24.2 billion.

Musk also warned that high interest rates could undermine demand for electric vehicles.

The comments marked a change in tone from Tesla CEO Musk, who had said last year that his company was “recession-proof.” The EV maker missed revenue expectations by the most in more than three years on Wednesday, despite deep price cuts.

“It didn’t have the same zipper on it. We await Tesla’s earnings calls with a sense of excitement and anticipation – and they usually deliver. Not Wednesday night,” Canaccord Genuity analysts said.

The company is expected to further cut prices in the current quarter to meet its annual delivery target of 1.8 million vehicles, even after gross margin contracted to 17.9% between July and September, compared to 25.1% a years earlier.

“We continue to believe that Tesla is a car company and that the competitive nature of the auto industry will make it difficult for any player to achieve a sustainable profit advantage,” said Bernstein analyst Toni Sacconaghi.