Tesla Rises Nearly 3% Premarket as Musk Says Texas Plant to Phase Out Cybertruck Production by Mid-2027 to Make Way for Cybercab Expansion

TradingKey - As of press time on November 6 ET, Tesla (TSLA) shares rose 2.8% in premarket trading to $353.3. In the previous trading session, Tesla shares fell 10.77% to close at $343.69.

[Source: TradingView]

Following the U.S. midterm elections, Democrats took control of both houses of Congress and won offices including the Texas governorship.

Investors are concerned that the election results could lead to stricter scrutiny of data center construction, while increasing policy uncertainty for Musk's businesses operating in Texas. Reuters also noted that a potential merger between Tesla and SpaceX could face more complex regulatory scrutiny.

On Thursday, the Nasdaq Composite Index fell 5.52% and the Philadelphia Semiconductor Index dropped more than 12%, as AI chip and data center-related stocks suffered concentrated selling.

Against this backdrop, Musk announced another production adjustment plan. He stated on social media platform X that Tesla plans to phase out Cybertruck production at Gigafactory Texas around mid-2027 to free up capacity for Cybercab production expansion.

[Source: X]

Cybertruck Phased Out as Texas Factory Makes Way for Cybercab Expansion

Since its launch in 2023, the Cybertruck has struggled to sustain market interest. The vehicle has also experienced multiple recalls and quality-control issues, while Tesla has repeatedly adjusted its pricing. The direct aim of this adjustment is to free up capacity at the Texas factory to expand Cybercab production.

However, this does not mean the Cybertruck will be discontinued globally. Reuters noted that the Texas plant is currently the only known Tesla facility capable of producing dedicated components for the model. Musk has not yet clarified whether production will be relocated in the future, leaving the Cybertruck's future production plans unclear.

The Cybercab is the primary model planned for Tesla's Robotaxi fleet. Tesla has begun production of the vehicle in Texas and plans to gradually ramp up output.

According to the company's third-quarter investor materials, the installed annual capacity for the Cybercab at the Texas plant exceeds 125,000 units. Tesla previously stated that the Cybercab will be primarily owned by the company and deployed for Robotaxi services.

Cybercab Expands Production as Robotaxi Commercialization Still Faces Tests

The Texas factory's installed annual capacity of over 125,000 vehicles does not mean Tesla can immediately deploy a Robotaxi fleet of the same scale. As production ramps up, the company will also need to meet autonomous driving regulatory requirements, expand service coverage, and control vehicle maintenance and daily operating costs.

Going forward, investors can focus on the progress of Cybertruck production adjustments, the Cybercab production ramp-up, and changes in Robotaxi operating areas and vehicle utilization rates. These factors will influence whether Tesla can translate newly added capacity into actual operational scale and revenue.