Tesla Killed the Cybertruck for the Tesla Cybercab Robotaxi (TSLA)

Tesla is ending the Cybertruck: why the stock went up

0:00 Tesla is ending Cybertruck production in Texas. Elon Musk posted that the line at the Gigafactory Texas will wind down around the middle of next year. And the day he posted it, the stock jumped about 4% after falling almost 11% the day before in a market-wide sell-off. So if you're bullish on Tesla stock, Musk is clearing factory space for the Cybertruck, the robotaxi with no steering wheel, and the market cheered. But if you're skeptical, stick around because the truck sold a small fraction of what Musk promised, and I'll show you the one number that makes Tesla such a hard stock to value right now.

0:28 Picture a restaurant that pulls its most famous dish off the menu, not because the kitchen is closing, but because the owner wants the grill for a new dish hardly anyone can order yet. That's Tesla this week. My name is Blake. I dig up stocks before the bull stampede, so you're not buying at the top like Wojack. And today on 9 to 5 Investing, we're talking about what ending the Cybertruck means for Tesla stock.

The truck: 250,000 a year promised vs actual sales

0:57 So let's start with the truck because the gap between the promise and the sales is the whole story. Now to be clear, Tesla hasn't said whether the truck moves to another plant or ends for good, but Reuters noted the Austin factory is the only one known to be set up to build it. Before it launched, Musk predicted the Cybertruck could sell about 250,000 units a year. And the reveal back in 2019 did not exactly build confidence because when they tested the shatterproof windows, two of them cracked live on stage.

1:19 And honestly, I myself remember when this happened, and I seriously wondered if it was just a publicity stunt to crack the windows on stage and create like a viral type of moment or if that actually was a failed demo. I'm not sure we'll ever know the truth there. Once delivery started, Kelly Blue Book estimates Tesla sold nearly 40,000 Cybertrucks in the US in 2024 and then about 20,000 in 2025, which is a drop of almost half. And it kept sliding.

1:43 Cox Automotive estimates US sales in the first 9 months of 2026 were about 11,600, down 28% from a year earlier. Tesla doesn't break out the Cybertruck by itself, but last quarter, its other models group, which is basically just the Cybertruck now that the Model S and Model X are gone, was 8,295 cars out of about 486,000. That's under 2% of everything Tesla delivered. Chad bought one anyway, and Chad wife still won't let him park in the garage. Not now, not ever, honey.

2:12 So why stop now? Well, the first reason is the math, the economics. Musk planned for about 250,000 units a year, and US sales are on pace for well under 10% of that. The second reason is that it never really went global. Europe's pedestrian safety rules kept it out, and last month Tesla canceled it for Australia and New Zealand. So the trucks were stuck in a handful of markets. And the last reason is that electric pickups in general have had a rough time in the US, and that's not just a Tesla problem.

2:35 But Musk didn't frame it as a failure. He called the Cybertruck the best vehicle Tesla has ever made. And when someone on X called this the end of an era, Musk said true, but the Cybertruck fleet will be around for a long time. And the Cybertruck's lead engineer, Wes Morrill, posted that it was an incredible technology development platform and lives on for Cybertruck. Said another way, the factory space is worth more to Musk as a robotaxi line than as a truck line.

The Cybercab robotaxi: what it is and where it stands

2:59 So what is the Cybertruck? The cost of autonomous transport will be so low you can think of it like individualized mass transit. It's a robotaxi with butterfly doors and no steering wheel or pedals, so it only works if the car can drive itself. Tesla started building it in April, and in September it started charging for rides with a small fleet in Austin. Reuters reported 45 Cybertrucks were registered in Texas when that paid service launched. Musk says the Austin Cybertruck fleet has grown about 10 times since launch.

3:25 Rides are supposed to reach Dallas this month, and he's freeing up a whole truck line to build more of them. So that's real progress, and it's a lot more than people expected a year ago. But here's the catch. Reuters reported the Federal Auto Safety Agency opened an audit into whether Tesla properly self-certified the Cybertruck under federal safety standards, and that audit is still open. So the car exists, it's carrying paying passengers, but the regulators still have questions.

3:47 Zūmer already booked a ride. He's trying to tip a car with no driver. Now here's what I think a lot of people are missing. Tesla isn't just dropping a slow seller. It's choosing to make fewer of the cars you can buy today, so it can make more of a car you mostly can't buy at all. That's a company shrinking its car business on purpose and betting the factory space on software that drives. We'll move from supervised full self-driving to unsupervised full self-driving where you could fall asleep and wake up at your destination.

The 1 number: Tesla at about 400x earnings

4:21 And the stock price already assumes that bet works. After Friday's jump, Tesla trades at close to 400 times its earnings over the last year and about 200 times what analysts expect it to earn this year. A price-to-earnings ratio basically just means how many dollars you pay for every $1 of yearly profit. So 200 means you are paying for profits that don't exist yet. Analysts expect Tesla to earn about $1.77 a share this year on an adjusted basis. Back in 2022, it earned $4.07.

4:47 So even if the analysts are right, the car company Tesla used to be was more than twice as profitable as the one they're forecasting for this year. That's the one number I promised you. Wall Street is paying a robo-taxi price for a company whose profits are less than half of what they were 4 years ago. Doomers have been saying that for years, and for once he's got a spreadsheet. Now to be fair, there's a reason people pay up. If the cyber cab works at scale, Tesla stops selling a car once and starts earning money every time a car drives someone somewhere.

5:22 That's a very different business to value. And the analyst market screener tracks had an average price target of about $407 in late October, which is roughly 14% above Friday's close. So the average analyst sees upside, but it's not the kind of gap that gets this channel excited. And then there's the SpaceX merger talk. Democrats just won control of Congress, and while Congress can't block a deal, it can slow one down with extra scrutiny. So even a fast version is a long road.

5:46 So if you own Tesla for the merger, this news doesn't really change that bet, and I covered that math in its own video. So here's the bull case in plain English.

Tesla stock bull case vs bear case

5:54 Musk is taking a product that missed its targets and turning its factory space into a place to build more robo-taxis, which is exactly what the stock price is betting on. And the robo-taxis are already carrying paying riders in Texas. And here's the bear case because I'm not going to soften it. Tesla is walking away from a car it can sell to bet on a car regulators are still asking questions about at about 200 times this year's expected earnings.

6:16 If the robot taxi rollout stalls, there isn't much car business underneath to hold the price up and a stock this expensive can fall a long way on one bad headline. For the record, I do own shares of Tesla, so keep that in mind.

What I'd watch next: Dallas, regulators, the Texas line

6:28 So here's what I would watch from here. First, the Dallas launch. Does Cybercab rides really start there this month? The ramp is real. Second, the regulators. If the safety agency signs off on how Tesla certified the Cybercab, that's a huge risk off the table. And then the factory. If Tesla says how many Cybercabs that freed up Texas line can build in a year will have a real number of value. And if you're thinking about buying size like a bet on a robot taxi business because that's what the price is, not like a bet on a car company.

6:54 That is exactly what I have done. I'm excited about this business, but my position is relatively small in comparison to my portfolio. I'm not betting the farm on Tesla, but I'm excited to be a part of it. So would you rather own Tesla, the car company, or Tesla, the robot taxi bet? Tell me in the comments. The Cybertruck's done, but your next video is already rolling. YouTube picked it and it did not crack on stage.