In Tesla’s recent shareholder letter for Q4 2023, Tesla noted that Cybertruck production capacity at its factory in Texas was above 125,000 units a year. Frankly, even if that just means the total capacity of the production line (not the actual production rate right now), that’s much higher than I anticipated, and it’s just below what Elon Musk once expected annual Cybertruck sales to reach — 150,000 units a year. More recently, on the Q3 2023 earnings call, Musk predicted that Cybertruck sales would probably top out at 250,000, and that Tesla would hopefully reach that production rate in 2025. The $60,990, 250-mile base model is also supposed to begin shipping in 2025.
I was previously a bit skeptical of the huge reservation number for the Cybertruck meaning anything. I had several reservations because a simple, refundable, $100 reservation was supposed to lock in the Full Self Driving (FSD) price of the time, which was $6,000 (compared to the $12,000 of today). However, the Cybertruck is here and FSD is not, so I canceled all but one of those reservations. And I will probably cancel the last one before long, since the Cybertruck is really too big (and too expensive) for me. I have the reservation still just in case. I figure a lot of people were in similar boats to mine and never thought much about the reservation list. Interestingly, on the recent shareholder conference call, an analyst asked about the reservation list, how long it is now, and how long it would take to fulfill existing orders. Tesla execs didn’t give a clear, solid answer to the inquiry. I assume that means that the length of the reservation list was overhyped a bit.
Notably, also, Tesla included this note in its shareholder letter: “We expect the ramp of Cybertruck to be longer than other models given its manufacturing complexity.” So, even with the stated production capacity of 125,000 a year, don’t expect Tesla to be pumping out 10,000 units a year anytime soon.
But, regarding next year, 2025, Elon Musk is hoping the production and sales rate will rise to 250,000 a year, and he thinks that’s where it levels off. I might have agreed with that conclusion a month ago, but I’m starting to wonder.
As much as the Cybertruck impresses in photos and videos, it’s got more of a gravitational pull in person. It just looks cool. However, something else also crossed my mind while visiting it in person: it comes across as acceptable, close enough to normal. What do I mean? I mean that even though it is clearly unique, it feels familiar enough now and close enough to a “normal SUV” that I could see a lot of normal people actually deciding to buy it. I’m not a pickup truck driver and I’ve never been, and I’m also not an SUV buyer or driver. So, I definitely struggle to know what appeals to buyers of those bigger vehicles when they go shopping. However, I think there’s a lot in the Cybertruck package to appeal to a lot of people. Also, that wasn’t a mistake above when I said it was close enough to a “normal SUV,” as it comes across like an SUV more with the automatic tonneau cover down.
On the one hand, the Cybertruck has similar utility to a normal pickup truck, with a long, flat bed when needed. On the other hand, it has more of an SUV vibe. That could backfire on the model, or that could get it a significant chunk of buyers from both markets. Ford sold a little more than 750,000 F-Series trucks in the US alone last year. Say Cybertruck pulls in 150,000–250,000 pickup truck buyers worldwide. Then you’re getting to Elon Musk’s targets. But say that you pull in another 150,000–250,000 buyers looking for an SUV. That could get the truck’s total to 300,000–500,000 sales a year, or midpoint estimate of 400,000.
The SUV vibes are one part of my thinking on why the Cybertruck could see higher sales than Musk says he’s targeting. The other part is what I recently wrote regarding the Chinese market — I think the truck/SUV could be a huge hit in China, especially if it can be reclassified as an SUV.
We’re all just guessing at this point. How many sales a year do you think the Cybertruck rises to?
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