November 30, 2023

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Elon Musk wants to “temper your expectations” with the Tesla Cybertruck

Elon Musk wants to “temper your expectations” with the Tesla Cybertruck

Elon Musk asked Tesla shareholders and Cybertruck reserve holders to “temper their expectations” as he reiterated that it will be very difficult to ramp up production of the Cybertruck.

With the release of Tesla’s third-quarter financial results, the automaker announced the start of deliveries of the Cybertruck on November 30.

On top of this announcement, Tesla also announced that it has “an installed production capacity of 125,000 Turkish Cybertrucks” per year at its Gigafactory Texas.

Those announcements were in the financial results presentation released after the market closed.

In a conference call after the release, Elon Musk had a very different message. He’s literally asking people to “lower expectations” when it comes to the Cybertruck.

He gave his usual “production ladders are 100 times harder than prototyping” speech, and I’m sure I’ve heard it from him 100 times by this point.

This time, however, he appears to be sending a clear warning that this is especially true for the Cybertruck — going so far as to say that Tesla has “dug its own grave” by adding complexity to the electric pickup truck:

So, I just want to emphasize that. I think this is our best product ever. I believe this is our best product ever, but it will take a tremendous amount of work to get to scale and be cash flow positive at a price people can afford. […] So, I just want to temper expectations about the Cybertruck.

The CEO later added that he sees Tesla eventually reaching production volume, which is estimated at around 250,000 Cybertrucks per year – 5,000 units per week, within about 18 months.

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He also explained that Tesla trying to do something “unique” with the Cybertruck complicated things because it “can’t copy” other manufacturing techniques and has to invent everything from scratch.

Musk essentially told bookers and investors not to expect significant volume or positive cash flow from the Cybertruck program until 2025.

Take Electric

While most reasonable people who follow Tesla already knew this, Musk’s explanation of this led to the stock crashing as much as 6% in pre-market trading today.

It appears they were some investors still holding on to the idea that Tesla might have a smoother production ramp with the Cybertruck than it did with previous vehicles.

I also think it’s important to note the “at a price people can afford” comment. I think we can expect the Cybertrucks to be expensive at first — though I still expect Tesla to keep their price below $80,000 to get the tax credit.

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