Tesla fans have been waiting for years to get their mitts on the futuristic Cybertruck, the stainless-steel pickup that promises to revolutionize the EV truck market. The wait is finally over, as Tesla has confirmed it will start delivering the first batch of Cybertrucks to customers on November 30, 2023. But before you get too riled up, there are some caveats to keep in mind. According to Tesla founder Elon Musk, the Cybertruck is an “amazing product” but also an “insanely difficult” one to produce and sell at an affordable price. The truck is so “radical” and “special” that it poses “enormous challenges” in reaching volume production and making it cash-flow positive.
Musk says he has driven the Cybertruck and loves it, but he also admits that building prototypes is easy compared to scaling production versions for sale to customers. The truck is made of stainless steel, which is hard to work with and requires tight tolerances to avoid gaps and discrepancies in the bodywork. The truck also has many unproven features and technologies that make it more complex and costly to manufacture.
Tesla’s Texas plant will have the ability to produce 125,000 Cybertrucks a year, but Musk says it won’t reach that level until sometime in 2025 at the earliest. He also says a million people have reserved a Cybertruck, but he doesn’t expect all of them to buy one. The truck was initially promised at a $40,000 starting price, but Tesla backed off that number in 2022 and has not announced the final pricing yet.
Musk says he wants to “temper expectations” for the Cybertruck, as it is a “special product” that only comes along once in a blue moon. He also says he thinks it is Tesla’s “best product ever,” but he acknowledges that it is not for everyone and may not appeal to hardcore truck buyers.
The Cybertruck is not the only hurdle that Tesla faces in the near future. The company’s third-quarter earnings showed a decline in profit and revenue growth, as well as lower operating margins. Tesla blamed higher production costs at new plants, higher interest rates, and supply chain issues for its weaker performance. The company also said it is spending more on research and development, especially on its AI-based driver assistance systems and its Optimus robot project.
Tesla is the current darling of the automotive industry, but it also faces many risks and uncertainties as it tries to maintain its leadership position and expand its product portfolio. The Cybertruck is a bold and ambitious product and it remains unclear whether it will gain acceptance in the marketplace.
The reality is, validating and scaling completely new manufacturing techniques is risky at best. Building, selling, and servicing conventional vehicles at scale is extraordinarily hard, and even Musk has conceded this. Remember, Tesla was profitless for years and Musk slept on the factory floor in Fremont during his stay in “production hell.” This news about the Cybertruck teething problems is an admission from Musk that Tesla is back in the Hades of vehicle validation. Despite all the breathless press coverage and fawning fandom, Tesla isn’t immune to this critical stage of auto production.
