Tesla Inc. investors initially looked past an earnings miss for the EV maker on Wednesday, focusing on some good news about the Cybertruck, but stock gains vanished after Chief Executive Elon Musk threw cold water on optimism about the electric pickup truck.

Tesla shares
TSLA,
-4.78%

rallied as much as 2% following the company’s third-quarter results after the bell, but at last check were down more than 3% in after-hours trading.

“I just want to temper expectations for Cybertruck,” Musk said during a call with analysts and investors after the results.

It will take a year to 18 months before the Cybertruck turns into a cash-flow contributor, he said, and there will be “challenges” to reaching volume production.

“I wish there was a way for it to be different, but that’s my best guess,” Musk said. “It’s our best product ever, but it is going to require immense work to reach volume production.”

Demand for the electric pickup is “off the charts,” Musk said, adding that more than 1 million people have submitted reservations for vehicle.

Don’t miss: Elon Musk says Cybertruck sales will start Nov. 30

“It is not a demand issue, but we have to make it and we have to make it at a price people can afford,” Musk said. When pressed for production expectations, Musk said he’d expect Tesla to be able to produce a quarter of a million Cybertrucks a year by 2025.

Musk’s comments on the call also included far-reaching criticism of high interest rates and concerns about the global economy and the overall health of the car industry. “I don’t want to be at top speed into uncertainty,” he said.

Earlier Wednesday afternoon, Tesla
TSLA,
-4.78%

said it earned $1.85 billion, or 53 cents a share, in the third quarter, compared with $3.3 billion, or 95 cents a share, in the year-ago period. Adjusted for one-time items, the company earned 66 cents a share.

Revenue rose 9% to $23.35 billion, the company said.

Analysts surveyed by FactSet expected Tesla to report adjusted third-quarter earnings of 73 cents a share on sales of $24.2 billion.

Gross margins were 17.9%, a drop from 18.2% in the second quarter, and 25.1% in the third quarter of 2022. Analyst expectations hovered around gross margins around 17.7%.

Tesla’s results “contained a number of unique/’one-time’ positives,” including credits, that added 7 cents to 8 cents to the bottom line, Barclays analyst Dan Levy said in a note Wednesday. Company comments in its letter to shareholders about its factories pointed to softer demand, he said.

In the letter, Tesla said it began a “pilot production” of the Cybertruck at its plant in Texas, and that the first deliveries of the electric pickup remain on track for later this year. Musk tweeted about a sales event on Nov. 30.

The company also said it expects to grow Model Y production at the Austin, Texas, factory “very gradually.” It called for a similar ramp-up of Model Y production at its Berlin plant.

Tesla’s Shanghai factory, whose recent downtime played a part in Tesla missing third-quarter deliveries expectations, “has been successfully running near full capacity for several quarters, and we do not expect a meaningful increase in weekly production run rate,” Tesla said. “Giga Shanghai remains our main export hub.”

Investors have focused on Tesla’s gross margins amid several rounds of price cuts, the latest of which were announced earlier this month.

The outlook for the fourth quarter was also highly anticipated. That was kept intact on Wednesday, with Tesla saying that it expects to “remain ahead” of its long-term 50% compound annual growth rate this year, producing about 1.8 million vehicles in 2023.

The EV maker earlier this month reported quarterly sales numbers that were below expectations. Some Wall Street analysts have estimated that deliveries of tens of thousands of Teslas will be shifted to the end of the year due to the longer-than-expected downtimes in Shanghai and Texas factories.

Tesla shares have more than doubled this year, compared with an advance of around 13% for the S&P 500 index
SPX.

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