Tesla: Cybertruck Production Will End in Favor of Autonomous Cybercab

Key Morningstar Metrics for Tesla

• Fair Value Estimate: $475.00
• Morningstar Rating: ★★★★
• Morningstar Economic Moat Rating: Narrow
• Morningstar Uncertainty Rating: Very High

Tesla TSLA CEO Elon Musk announced on X that the firm will wind down Cybertruck production in mid-2027.

Why it matters: Musk said the Cybertruck line will be shut down to make room for the Cybercab, Tesla’s dedicated autonomous vehicle used in its robotaxi ride-hailing service that has no steering wheel or pedals.

• We think the move makes strategic sense. The Cybertruck line was initially set up for annual production of 125,000 vehicles, but sales were less than 30,000 in 2025, based on WardsAuto data. The truck production line was likely weighing on automotive segment profit margins.
• Tesla was not able to balance Cybertruck price and baseline features. Musk initially aimed for a $40,000 version meant as a work truck, but the cost structure likely prevented this from occurring with adequate specifications, such as range and power.

The bottom line: We maintain our $475 per share fair value estimate for narrow-moat Tesla. Our long-term forecast assumed fewer than 15,000 Cybertrucks were delivered each year, so it doesn’t impact our total Tesla deliveries forecast.

• We view Tesla shares as undervalued, trading in 4-star territory and around 25% below our fair value estimate. We think the current price offers investors a free option on the humanoid robot business, which is around the difference between our valuation and the current price.
• We maintain our Exemplary Morningstar Capital Allocation Rating. Winding down a vehicle that sold below expectations in favor of increased production of the Cybercab, which underpins Tesla’s robotaxi ambitions, is a prudent long-term move and supports our view that Musk is an efficient capital allocator.