$25,000 Tesla Getting Really, Really Close. Two Thirds Say No To Cybertruck In Survey
In an interview with Sandy Munro posted to YouTube on December 5, 2023, Elon Musk said the the next Tesla to be introduced, now that the Cybertruck has officially launched, will be the much anticipated $25,000 Tesla that has been promised since 2020. Musk told Munro his company is “quite advanced” in its work on the affordable Tesla, and that he is reviewing production plans weekly.
“The revolution in manufacturing that will be represented by that car will blow people’s minds,” Musk said. “It is not like any car production line that anyone’s ever seen.” He added that the new vehicle is currently slated to be built at the Gigafactory in Austin, Texas, where the Cybertruck is being manufactured, albeit slowly, with a secondary assembly line at a new factory scheduled to be built in Mexico.
CleanTechnica readers are all above average, and so most of you know that during the most recent Tesla earnings call, a rather morose Elon Musk let it be known that with high interest rates and a number of other factors, that new factory in Mexico was apt to be pushed back a bit. In fact, Elon gave no hint about when that project would move forward.
Now, just a few weeks later, we hear that factory could be involved in building the next Tesla, a car (presumably) priced at around $25,000. Has something changed since that earnings call? Is the Mexican factory back on? Getting information from inside Tesla is difficult under the best of circumstances, impossible at other times, leaving us to read the tea leaves and guess what may happen next at Tesla.
One month ago, Reuters reported that an anonymous source was claiming a new Tesla model that would start at €25,000 would be built at the Gigafactory in Grünheide, Germany, at some point in the not too distant future. Is that a different vehicle than the one Musk told Sandy Munro about? And wouldn’t the most likely place for a less expensive Tesla to appear be in China where price competition is most intense?
Those are all rhetorical questions to which there are no firm answers. For those of us on the outside looking in, all we can do is hang onto our shares in Tesla and wait for them to reach the next level. Delivering ten Cybertrucks didn’t move the needle much (in fact, the share price went down initially) but announcing a $25,000 model could do wonders for the company’s stock price. Fingers crossed.
The market for electric cars in the US has undergone some serious changes in the last 12 months, sparked in large part by Tesla lowering prices on its two best selling models — the Model 3 sedan and Model Y SUV. Business Insider says the market has now turned from wealthy early adopters to more value minded buyers looking to switch from gasoline to battery power.
There is now a need for more affordable options in the EV space. Many car companies have responded by lowering their production plans, while dealers are relying on incentives to move electric cars and trucks off their lots. Adding more affordable models will only make it harder for Detroit car companies and other legacy automakers to compete with Tesla, especially since these companies still aren’t turning a profit on their electric cars.
Tesla Cybertruck Survey
If the reaction to Cybertruck’s pricing is any indication, Tesla itself is not safe from price sensitivity in the EV market. Having cut prices multiple times this year, it has conditioned customers to expect lower prices, not the price increases that were common before. When the first ten Cybertrucks were delivered last week, Tesla announced the least expensive option will start at $60,990 — $20,000 more than originally promised. Tesla says that version of the Cybertruck will have a single electric motor and a range of 250 miles but won’t be available until 2025 (at the earliest).
Two other versions will be available sometime in 2024. A dual-motor model with 600 horsepower and 340 miles of range will cost $79,990, while the top-of-the-line model with three motors, 845 horsepower, and 320 miles of range will be priced at $99,990. For those who had visions of sugar plums dancing in their head about buying a Cybertruck for under $40,000, the official news from Tesla has to be a dash of cold water.
The pricing news has not gone down well with potential buyers, some of whom told Business Insider they were counting on a more affordable option with the Cybertruck. A company called Canaccord Genuity (yeah, that’s a new one on us) tells Yahoo Finance that two thirds of people polled after the Cybertruck price announcement said they are not interested in buying one at the new prices.
In the survey, 67% of respondents answered “no” as to whether they would buy the Cybertruck after pricing and truck specifications were revealed, whereas 33% answered “yes.” Canaccord would not disclose the total number of people surveyed, but did note that it included a broad group of respondents who were not among the 2 million Cybertruck reservation holders.
“We had an incredibly robust response to our survey. It was interesting to hear that two-thirds didn’t want it and, frankly, that was a lot better than we expected,” said Canaccord analyst George Gianarikas. “Based on the discussions I’ve had individually, which have been in the hundreds, it’s the look of the vehicle that gets people excited or revolts people. It’s not that cheap, right? The version that’s currently available is $100,000,” Gianarikas said. He added that the “technology is going to get people excited. It’s different, the same way the iPhone was different when it first came out. It’s got incredible stuff underneath the hood, so to speak.”
Gianarikas noted that the Cybertruck will be the first vehicle to move away from the conventional 12-volt battery that has been the industry standard for powering headlights, heating and air conditioning systems, and windshield wipers since 1955. Changing over to a 48-volt system increases efficiency and allows electrical systems to use more power when needed. More importantly, the wiring for a 48-volt system is cheaper than it is for a 12-volt system since 85% less copper is required.
The Takeaway
We know almost nothing about the upcoming entry level Tesla model. An educated guess would be that it will be a somewhat smaller SUV, since those are the types of vehicles most in demand in the marketplace today. But when it will get here is unknown and unknowable. Based on Tesla’s focus on high-pressure casting, we can assume that process will be used to make the new car, possibly in one single casting, which will be something never before done in the automotive industry.
With regard to the Cybertruck, it remains a polarizing vehicle. The real question is whether it will appeal to traditional truck owners who actually haul stuff or snowbirds who haul travel trailers to Florida in the winter. To be honest, the entry level single-motor version that costs $60,000 but only has a projected range of 250 miles seems rather underwhelming, once you get past the outré styling.
Elon promised us something unlike anything ever seen before when he announced the Cybertruck, and he certainly delivered on that promise. But how is the Cybertruck when it comes to doing the things that truck owners cherish most? The jury is still out on that question and will be for a while yet. Certainly, the initial reaction has been rather muted.
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