There’s something admirable about trying to reinvent the wheel, primarily because of how difficult an undertaking can be. It’s basically the allure behind Tesla’s decision to commence with the Cybertruck.
However, the difficulty of taking on that challenge appears to be a bit more than what Tesla was hoping to handle. At least that's the impression that Tesla CEO Elon Musk’s latest statement on the long-gestating Cybertruck gives off.
Is the Cybertruck Really Digging Tesla’s “Grave?”
During Tesla’s most recent quarterly call with investors, Musk praised the Cybertruck as “an amazing product” but also noted that “reaching production volume” will be an “enormous challenge,” so he doesn’t expect Cybertruck production to become “cash-flow positive” anytime soon.
For anyone hoping to purchase a Cybertruck at the end of next month – we hope you’ve saved up a lot because they will not be affordable anytime soon. But the increasing likelihood of a hefty price tag isn’t the only thing keeping buyers from getting one because Tesla is struggling to keep up with the demand for them.
Musk claims that at least one million people have already reserved a Cybertruck online; however, Tesla’s Texas Gigafactory, where the Cybertruck will be produced, only has the capacity to manufacture around 125,000 trucks a year.
Consumers could stop ordering Cybertrucks right now, and it will still take Tesla eight years to produce enough trucks to meet that demand. Taking almost a decade to get someone their product after ordering it isn’t the best business strategy.
Unsurprisingly, Tesla’s Cybertruck struggles (for example. its release has been delayed numerous times) aren’t that different from what many EV startups face – their products are expensive and difficult to make.
While it’s unlikely that the difficulties surrounding the Cybertuck will cause Tesla to go under financially (like, say, Volta), this one-of-a-kind truck was initially supposed to be offered at around $40,000, a number Tesla swiftly rescinded last year. When the body is made out of stainless steel – a material that is notoriously hard to work with – it gives the impression that the Silicon Valley-based company bit off way more than it could chew with this ambitious undertaking.
Did Musk and the company really know what they were doing when they started the project? The history of broken promises and multiple delays leading up to this moment answers that question.
However, despite all these difficulties (and mounting production costs), Musk has still dubbed the Cybertruck as Tesla’s “best product ever” even though he also reportedly told investors that the company has dug their “own grave” with it because it’s so “hard to manufacture.”
Potential Next Steps for the Cybertruck
Musk has alleged that production rates for the Cybertuck could double by 2025, reaching up to 250,000 trucks a year – though he also admitted to that estimate only being his “best guess.”
Given exactly how things have unraveled in the four years since the Cybertruck’s prototype was first unveiled, that guess isn’t something we’d put much faith in.