Tesla CEO Elon Musk speaks at the debut of the Cybertruck in November 2019.
AFP via Getty Images
Tesla’s highly anticipated Cybertruck, an unconventional pickup truck designed with a distinct blocky look, is set to finally hit the market in November. However, CEO Elon Musk advises investors to manage their sales expectations due to the considerable challenges and costs associated with its manufacturing process.
Musk spoke during Tesla’s recent earnings call, where he stated, “It’s an amazing product, but I do want to emphasize that there will be enormous challenges in reaching volume production with the Cybertruck and then in making the Cybertruck cash flow positive. While I think this is potentially our best product ever — I think it is our best product ever — it is going to require immense work to reach high-volume production and be cash flow positive at a price that people can afford.”
Musk did not disclose a specific sales target for the Cybertruck in 2024. However, he mentioned the possibility of achieving sales of 250,000 units per year by 2025. He did not elaborate on the specific “enormous challenges” he referred to.
During its public debut in November 2019, Musk claimed that the Cybertruck would be available for purchase by 2021 with a starting price as low as $39,900. Although Tesla has not released the official pricing for the truck’s release, industry analysts anticipate a significantly higher price point than initially announced.
Despite the potential price increase, Musk asserts that demand for the Cybertruck is “off the charts,” with over 1 million potential buyers already reserving the vehicle by putting down a $100 deposit. However, it remains uncertain how many of these potential buyers will follow through with their purchases if the price exceeds their expectations.
Tesla’s entry into the pickup truck market is driven by its appeal as the largest and most profitable segment in the auto industry. While Tesla is not the first to introduce an electric truck, it faces competition from established players like Ford, which launched its electric F-150 Lightning starting at $54,995. Other competitors include GM, offering the electric Chevy Silverado at $52,000, and Stellantis, preparing to sell the electric RAM 1500 REV priced at $58,000 with an impressive range of up to 500 miles per charge. Additionally, the startup Rivian offers the electric R1T, targeting customers seeking a non-traditional truck experience for camping and beach trips with friends.
Musk’s remarks came after Tesla reported financial results for the last quarter, which fell below analysts’ expectations. Tesla generated $23.4 billion in sales during the three-month period ending September 30, slightly below the forecasted consensus of around $24.2 billion. Furthermore, the earnings per share of $0.66 also fell short of the estimated $0.72. Tesla’s year-over-year revenue growth of 9% was its weakest performance since the second quarter of 2020.
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