The mystery of the Cybertruck orders

Just how many of its radically designed Cybertruck e-pickups has US EV pure play Tesla actually managed to sell? The firm’s CEO Elon Musk remains bullish on demand, but a snippet of information offered by a Tesla executive suggests turning reservations into orders might as yet have been underwhelming.

The potentially key data point was offered up the firm’s vice-president, supply chain Karn Budhiraj during Tesla’s Q4 results call. “I want to thank all the Cybertruck reservation holders for their patience,” Budhiraj said, very much sticking to the rosy demand narrative. “The reservation to order conversion rates so far has been very, very encouraging.”

But this does not tell us what this conversion is. What he said next, though, gives us something with which to work.

“If the trend continues as it very likely to be, we will have soon sold out all the builds in 2024,” Budhiraj says. In other words, Tesla has yet to receive commitments to buy the Cybertruck that exceed how many of the vehicles it expects to make this year.

Expectation management

And, while Tesla has got given an exact number on that, its language has consistently downplayed expectations for 2024 production. Musk has returned to the ultimate target of 250,000 annual production for Cybertruck that he laid out at Q3 results in October, before lowering the figure to 200,000/yr in November.

But he has been consistent that this is not the number for 2024. “I think we will probably reach it sometime in 2025,” he suggested in October.

And he warned then that reaching plateau production would need a “staggering” effort over an 18-month period from initial deliveries. “I do want to emphasise that there will be enormous challenges in reaching volume production with the Cybertruck,” Musk said.

“Special products that come along once in a long while are just incredibly difficult to bring to market to reach volume,” he continued. And it was a theme to which he returned the following month.

“The production line will move as fast as the slowest, most unlucky, and most foolish part of the entire production line,” the Tesla chief said.

All of that points to a lot fewer Cybertrucks getting made in 2024 than the 200,000-250,000/yr Tesla is hoping to hit in 2025. Most likely a five-figure number, not a six. And it has yet to sell that many Cybertrucks yet, according to what Budhiraj said.

Musk put reservations at “over a million” in October. If less than 100,000 of those have as yet converted into orders, that is not a particularly stellar conversion rate as yet.

Still optimistic

Tesla’s narrative around demand remains bullish. “We have new orders come in after the launch,” says Budhiraj. “The order numbers keep growing. So we are now all hands on deck, focused on ramping so we can fulfil all the demands in a reduced wait time.”

And his boss is equally buoyant. “It is important to emphasise that this is very much a production-constrained situation, not a demand-constrained situation,” says Musk. He even suggests demand levels could allow Tesla to boost Cybertruck prices.

“Obviously, we could dramatically raise the price, but that does not feel right to us to gouge people for early delivery. Really, the demand is off the hook, as long as the price is affordable,” he continues.

There is clearly a disconnect here between what Budhiraj says about how many orders Tesla has taken and what the executive team is saying about demand. As soon as Cybertruck production and sales volumes start showing up in Tesla’s quarterly reporting of them, expect significant scrutiny on what the actual numbers are.