Cybertruck: potential for a Tesla misstep

A possible struggle to ramp up production of a complex vehicle in an increasingly crowded competitive and questions about the pickup buyer demographic’s willingness to adopt BEVs both shadow the Tesla Cybertruck as it finally begins rolling off the production line in Texas. Tesla CEO Elon Musk has gleefully left egg on his critics’, and scoffing competitors’, faces for years, but converting non-binding deposits into firm orders for the otherworldly vehicle could be among his steepest challenges to date.

The man himself, unsurprisingly, seems unfazed. "Demand is so far off the hook, you cannot even see the hook," he described Cybertruck appetite to Tesla’s equity analyst community as the firm announced its Q2 results.

“This is the first truck that we are aware of that will have four doors over a six-foot bed and will fit into a 20-foot garage. One of the elements of good design is it should feel bigger on the inside than it looks on the outside,” he enthuses.

“We try to get right in the middle of the Goldilocks zone, not too big, not too small, and then really maximise the utility of the volume. And we cannot wait to start delivering it later this year.”

No firm dates

But what Musk seems currently unable to do is assuage worries about the schedule to get into mass production and the series of delays that have stalled Cybertruck’s launch. In fact, he is unusually reticent about delivery schedules and ramp-up, albeit noting that Tesla now has “a lot of experience with production ramps” and is “certainly better” at them.

“First order approximation, there are like 10,000 unique parts and processes in the Cybertruck. It will go as fast as the least lucky, least well-executed element of the 10,000. It is always difficult to predict the ramp initially, but I think we will be making them in high volume next year, and we will be delivering the car this year,” Musk says.

“We do not know pricing yet but the design seems challenging to manufacture, with risks on cadence and cost,” cautions Philippe Houchois, managing director at bank Jefferies. “I do want to emphasise that the Cybertruck has a lot of new technology in it, like a lot,” admits Musk.

One of those elements, which promises to increase competitiveness in the long term, but might also bring short-term delivery risks is new battery technology. “We are preparing to launch our Cyber cell, which is 10pc higher energy density than current production — accomplished through process and mechanical design optimisation.

“As we scale Cyber cell production through the end of the year and early next, we should be in a comfortable place on cost per cell,” Musk says. Great news on costs, slightly worrying increased scope for something else to snag the ramp.

Watching brief

The years of delays, which could be compounded by anticipated Q3 factory closures, have stripped Tesla of its first-mover advantage. As well offerings from legacy OEMs GM and Ford, the Rivian R1T pickup is already occupying Tesla’s exact space — a non-legacy EV product from an exciting new pureplay with a cult following.

Rivian delivered only 12,640 vehicles in Q2, and not all of them R1Ts. But that was still a 159pc rise compared to 7946 in Q1.

Competition may already be strong, but there is a chance that Cybertruck’s delays will have benefitted Tesla in getting a greater understanding of the fledgling e-pickup market. Tesla has had plenty of time to observe buying patterns and consumer preferences, and this “will only push the company to continually refine the formula and better understand what its customers are looking for from a brand-new product,” thinks Jonathan Bryce, who has reviewed the Cybertruck for Autocar magazine.

Indeed, losing its head-start may not be such a bad thing for Tesla, since sales of the Ford F-150 Lightning and the GMC Hummer EV pickups have underwhelmed. Ford earlier this month reduced the price of the F-150 Lightning by almost $10,000 in a hope to kickstart growth. In total the e-pickup has seen around 24,300 deliveries in North America since its rollout 18 months ago, but sales dipped after a recall in February and not recovered to highs seen in October 2022.

And the market will only become more crowded, with GM’s Chevrolet Silverado EV set to arrive on the scene in the autumn. Stablemate the GMC Sierra EV will follow in early 2024, with Franco-Italian automaker Stellantis’ Ram 1500 REV also due later in the year.

Core demography

Other fundamental questions remain, though. Is the target demographic for pickups simply culturally geared towards ICE vehicles such that BEV adoption will be slow? And, even if the appetite is there, is Cybertruck, with its radically different styling, the vehicle to prove e-pickups viable?

While there are concerns on the former, the latter may be more pertinent. “The current demographic that buys pickups may be opposed to it because it is such a significant change over the status quo,” Bryce says.

“The fact it is all-electric is, I do not think, the main 'concern'. The fact [is that the Cybertruck] almost represents an entirely new way of thinking about what a pick-up actually is. It is not styled like anything I have seen before, it does not perform like many other pick-ups, and its strengthened exoskeleton is novel on what will be a civilian road car.”

There may be some, albeit by no means a majority view, who agree with leading automobile designer Frank Stephenson, who has branded the Cybertruck as “cold”, “sterile”, and “paranoid”. Stephenson also voices concerns about “how dated [the Cybertruck] is going to feel in a very short timespan”.

Tesla, on the other hand, sees Cybertruck’s striking visuals as a positive. “It does not look like any other vehicle because it is not like any other vehicle,” says Musk.

Bryce thinks that “it will attract customers who want to make a statement” and that there is a long history of similar products in the history of the automotive industry. Dividing opinion is looked on as a positive by Tesla design team, who want to challenge cherished ideals about the pickup truck.

“The product is different,” admits Houchois. “But it has to be in a segment that is dominated by the Detroit 3 and other brands. Notably, the Japanese have failed to make inroads with more conventional offerings.”