Cybertruck Production Delays?
Tesla’s Cybertruck has had a wildly successful year, but it feels like things have been slowing down right when the truck should be heading out to buyers - and during the Q3 earnings call, CEO Elon Musk went over some specifics as to when exactly customers should start getting their Cybertrucks, and when the company could expect them to actually make money.
Like we said, the first half of this year was spent in a Cybertruck frenzy. Any sighting of teh vehicle spawned a huge number of articles analyzing what details in the leaks could mean. Meanwhile, Tesla themselves were fairly open about the production process - barely hiding the stacks of casted parts and internal leaks from GigaTexas.
Everything looked good, and the vehicle’s prototypes seemed to show that Tesla was on schedule to send out their first deliveries in September. Then October. And now - as of this recent earnings call - a solid November 30th.
So you can imagine why some investors were shocked to hear Musk say during the earnings call that:
“I just want to temper expectations for Cybertruck. [...] financially, it will take a year to 18 months before it is a significant positive cash flow contributor.”
That’s more than a little confusing, right? This whole time we’ve heard that Cybertruck’s pre-production has been going very well - we’ve even seen release candidates for well over a month now, and all the discussions around the impending ramp-up of production has been centered around how the Cybertruck was designed for mass manufacturing. Production lines were halted and retooled, and two gigantic, 9000 tonne gigapresses were bought and set up at GigaTexas.
So how does a vehicle with such a strong pre-production phase and over a million pre-orders take 18 months to become cash positive?
Well we didn't get a direct answer on that from anyone in the Earnings call, but Elon did say a few things that point to the answer - the biggest one being the infamous "We dug our own grave with Cybertruck" quote.
Just after clearing up a question about the 18 month timeline, Elon says that the 18 month estimate is a maximum - as in the longest he and his engineers think it would take to make enough Cybertrucks to sell to those pre-order holders and start making a profit.
He's clear to point out that this would be a very disappointing result - as he clearly believes they can ramp up production quicker than that - but 18 months is a possibility so he has to tell the investors that.
And here’s where that quote comes in, while Musk is attempting to explain why production could be slower than the company first anticipated. He says that;
“[...] we dug our own grave with the Cybertruck.Cybertruck’s one of those special products that comes along only once in a long while. And special products that come along once in a long while are just incredibly difficult to bring to market to reach volume, to be prosperous.”
And here’s why things got a bit confusing. Sure Cybertruck was made for a smooth production cycle - large parts of its frame being made in those gigapresses are a good example of how Tesla streamlined the manufacture of their stainless steel truck.
But we're still talking about a completely unique vehicle here. The Cybertruck has probably the least in common with any other vehicles in the Tesla fleet - meaning it's a lot harder to share parts - which is one of the easier ways to help streamline production.
Add to that the extra features like the Cybertruck’s 48 volt electric system, or its newly announced 800 volt powertrain - which will allow it to charge much faster, and brings the truck on par with vehicles like the Lucid Air, which uses a 900 volt architecture currently.
Speaking of which, the 800 volt architecture is one of the better takeaways from the Cybertruck-focused parts of the Earnings call. A powertrain like this is a huge upgrade not just for recharge times - but it also shaves weight off the vehicle because there’s less copper in the system overall, and the power transfer uses a lower current, which makes the whole system operate more efficiently.
But it does make the Cybertruck a little harder to build, for right now at least. Tesla executives said that currently, GigaTexas has the ability to produce 125,000 Cybertrucks per year - and that’s not nothing. The confusion seems to have been in the slight shifting of expectations around the speed of the ramp-up - and given the hype around the Cybertruck, that’s probably the most predictable problem Tesla could have right now.
As we said earlier, the hard date given to investors for teh first deliveries - and therefore the Cybertruck Delivery Event - will be on November 30th at the latest. So those first lucky owners will get to have their new trucks in time for the holidays after all.