Tesla dampens Cybertruck expectations

US EV pure play Tesla’s much-anticipated Cybertruck e-pickup remains on schedule for first deliveries later this year. But CEO Elon Musk warns that launch may be a picnic compared to scaling production.

"I just want to temper expectations for Cybertruck. It is a great product, but financially it will take… a year to 18 months before it is a significant positive cash flow contributor,” Musk says.

The Tesla chief expects production of c.250,000 Cybertrucks a year, but cautions that rate will not be reached next year. “I think we will probably reach it sometime in 2025,” he suggests.

And he warns of a “staggering” effort needed over an 18-month period to get from initial deliveries to both volume and, crucially, “prosperity”.

Blood, sweat and tears

“I do want to emphasise that there will be enormous challenges in reaching volume production with the Cybertruck and then in making a Cybertruck cash flow positive,” Musk continues.

“This is simply normal for when you have got a product with a lot of new technology or any brand-new vehicle programme, but especially one that is as different and advanced as the Cybertruck. You will have problems proportionate to how many new things you are trying to solve at scale.”

And just how much of a challenge Tesla is setting for itself by the scale of its Cybertruck ambitions is a point to which Musk returns. “If we just try to do some copycat vehicle design, … just a distinction without a difference, then it is really not that hard,” he says.

“But if you want to do something radical and innovative and something really special like the Cybertruck, it is extremely difficult because there is nothing to copy. You have to invent not just the car but the way to make the car.

"So, the more uncharted the territory, the less predictable the outcome,” he continues. “We dug our own grave with the Cybertruck.”

Best in show

Musk stresses that Cybertruck is, in his view, Tesla’s “best product ever”. “Cybertruck is one of those special products that comes along only once in a long while,” he says.

But the Tesla chief again cautions that it will “require immense work to reach volume production and be cash flow positive at a price that people can afford”.

“Special products that come along once in a long while are just incredibly difficult to bring to market to reach volume, to be prosperous. It is fundamental to the nature of the newness,” he warns.

“The demand is off the charts — we have over 1mn people who have reserved the car,” Musk maintains. This is an interesting number in itself. As recently as late July, a publication as reputable as Forbes was using a 1.7mn figure for reservations.

Tesla boosters have been bandying around a 2mn figure. So Musk’s 1mn+ could been seen as conservative, or even possibly represent cancellations. Not everyone has been convinced that the visually arresting Cybertruck will translate into mass poularity

“It is not a demand issue,” Musk insists bullishly. “But we have to make it, and we need to make it at a price that people can afford.”