Tesla's Cybertruck: High Price Could Dampen Enthusiasm for Electric Pickup

The starting price for Tesla's long-delayed Cybertruck is $60,990, which is more than 50% more than what CEO Elon Musk had advertised in 2019 and a price that experts predict would appeal to a privileged few.

According to Musk, the vehicle's design, which is based in part on a car that was converted into a submarine in the 1977 James Bond film "The Spy Who Loved Me," is gleaming stainless steel and curved like flat planes.

Experts warn that in addition to increasing production complexity and costs, its novel body material and unusual, futuristic design might drive away traditional pickup truck purchasers who prioritize usability.

The Cybertruck, according to Musk, has "more utility than a truck" and is "faster than a sports car." Musk has set the prices of the vehicle's three variations between $60,990 and $99,990.

At an Austin, Texas event, he drove a Cybertruck onto a stage to applause from the audience and then gave the cars to roughly a dozen clients.

Regarding the truck's design, he declared, "Finally, the future will look like the future," showcasing a video of the Cybertruck hauling a Porsche 911 and defeating another 911 powered by gasoline in a brief race.

Tesla's stock dropped 2% during after-hours trading, finishing 1.6% down at $240.08.

Tesla's website displayed the vehicle's costs, even though Musk did not disclose them during the event. The Cyberbeast, the model with the maximum performance, and the all-wheel drive trim, which starts at about $80,000, will be offered the following year.

By 2025, the most affordable rear-wheel drive model, whose starting price is projected to be around $61,000, will be accessible.

Production Delays and Financial Considerations

About four years after its first announcement and two years after production was originally scheduled to start, Tesla produced its first production candidate, the Cybertruck, in July. Musk stated the year before that supply chain constraints influencing component procurement caused Cybertruck manufacturing to be delayed until 2023.

Musk stated that although he believes the Cybertruck to be "our best product ever," he wants to "temper expectations" surrounding it during a Tesla earnings call in October.

Elon Musk, in discussing the Cybertruck, acknowledged significant challenges in achieving volume production and attaining positive cash flow. Musk highlighted the inherent difficulties in scaling production for a vehicle with advanced technology, especially one as unique as the Cybertruck.

While expressing confidence in the product's quality and acknowledging exceptional demand with over a million reservations, Musk estimated that it might take a year to 18 months for the Cybertruck to become a substantial positive cash flow contributor due to the complexities involved in manufacturing at an affordable price.

The Challenges in Production

Additionally, Musk has frequently discussed how challenging it is to construct the Cybertruck due to its unconventional design.

Since unpainted stainless steel is difficult to build with and fix due to its durability-a quality that Musk has praised-it is not typically utilized for automobiles. However, this is the case with the truck. Stainless steel is a tough metal for the kind of massive stamping machines that are usually used in car manufacturing to swiftly bend metal into form.

Additionally, unlike other big pickups, it is unibody built instead of having a separate body and chassis. Small, light trucks like the Ford Maverick and crossover SUVs are more likely to have unibody structure. Body-on-frame construction is typically used by automakers for heavy duty vehicles because to its robustness and adaptability for towing large objects.