Jim Farley remembers the first time he saw a Tesla Cybertruck. Ford dominates the North American pick-up market so its chief executive was curious to look at the competition.
“I think the Cybertruck looks like it does for a combination of many reasons, partly aero[dynamics] . . . but actually most of it is to reduce investment,” he told the Financial Times.
The unusual angular design meant Tesla could make the Cybertruck’s roof from a single piece of metal, he said, rather than investing in an expensive stamping press. This would cut the cost of manufacturing, he added, but was likely to make it “hard to scale”.
Elon Musk seems to agree. Earlier this week, the Tesla boss warned of “enormous challenges in reaching volume production” on the model, which was first unveiled four years ago.
“This is simply normal . . . when you’ve 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,” he told investors. “We dug our own grave.”
The Cybertruck is the first new Tesla vehicle since the Model Y in 2020, at a time when profits have fallen because of price cuts across its range to spur demand.
Its Semi haulage truck and Roadster sports car are not yet in production, and the anticipated lower-price Model 2 is not expected before 2026.
When the Cybertruck does arrive — the first deliveries are now expected at the end of November — it will take Tesla into the most lucrative part of the North American car market, and directly into competition with the biggest money-spinner models from Ford, General Motors and Stellantis.
One in five cars sold in the US and Canada last year were pick-up trucks, according to data provider Jato Dynamics. Half of those, around 1.5mn vehicles, were “full-sized” pick-ups, such as the Ford F-150 or Chevrolet’s Silverado, the market where the Cybertruck will compete.
Even by Tesla’s standards, it is a hotly anticipated — and long delayed — vehicle. When the Cybertruck was unveiled in 2019 to the pounding soundtrack from Mad Max: Fury Road, Musk said Tesla wanted “to try something different”. Production was set for 2021, and deposits began pouring in.
Then early last year, reports emerged that engineers were struggling with seemingly basic issues including suspension, braking and sealing the vehicle’s unusual shape against outside noise.
Tesla declined to comment at the time, but it was not until this year that it began offering demonstration rides in a pre-production version.
“It’s an impressive beast, but it’s a beast,” said Philippe Houchois, an auto analyst at Jefferies who was one of the handful selected to try it.
Several design aspects — such as four-wheel steering that allows it to change lanes at high speed very smoothly — were impressive, he said. “It’s very comfortable. It drives well.”
The unconventional design, as well as Tesla’s reliance on “casting” — using pieces of moulded metal rather than relying on expensive pressing machinery — a manufacturing technique that was unproven at scale when it revealed the car in 2019, had probably held back production, he said.
By warning about production difficulties, “Musk came clean on something we suspected for a long time,” Houchois told the Financial Times this week. “That was always the risk with something so different. You just look at it and think: this is a nightmare to manufacture.”
Two people with knowledge of the company’s supply network said that Tesla also changed its mind on some of the engineering late in the process, which had a knock on effect on its parts suppliers. This, along with volume targets that changed almost weekly, added costs and delays to the project, the people said.
Tesla did not immediately respond to a request for comment.
Wednesday was also the first time that Musk put a figure on expected Cybertruck production at the company’s Texas plant. The goal is around 250,000 units a year, though Tesla does not expect to hit this rate until 2025. Meanwhile, pre-orders stand at more than 1mn.
Ford, by comparison, makes more than 1mn pick-ups a year, though that includes smaller versions.
Yet if it can get the Cybertruck right, the potential windfall for Tesla is huge.
Since it launched the Model S in 2012, Tesla sales have been of sedans and SUVs. But pick-ups take it into the industry’s real gold mine.
At Stellantis, which owns the Ram and Jeep brands, European van and US truck sales account for just under half of the company’s profits, with per-vehicle margins dwarfing those of its passenger cars.
Ford makes much of its profits from pick-ups, while the Kentucky plant that manufactures the Super Duty is the single most profitable factory in the carmaker’s entire global network.
In this lucrative market, the race to electrify has already begun. Ford’s F-150 Lightning electric truck starts from $42,000, while General Motors has launched an electric Hummer, which starts from $80,000 and weighs almost five tons.
Ram plans three new electric pick-ups from next year, and may bring smaller electric pick-ups to Europe as well, commercial vehicle boss Jean-Philippe Imparato told the FT this week. Stellantis believes it can double truck and van revenues this decade.
The industry believes that electric vehicles like the Cybertruck will bring new customers to the market.
“Over 60 per cent of our R1T [pick-up truck] customers have never owned a pick-up before,” said RJ Scaringe, founder of Amazon-backed EV start-up Rivian. “So we’re not only creating new EV customers. We’re also creating new truck customers.”
Tesla’s distinctive design may also appeal to a new customer base.
“If you go after new [truck] customers you design the vehicle very, very differently,” Farley told the FT recently. There is, he argues, also a huge swath of people who would happily drive a pick-up but are dissuaded by some of the associations.
“Who is going to go to a country club and pull up in a truck in . . . San Francisco?” he asked “If you design a vehicle differently, there are actually a lot of people who want to own a pick-up truck.”
One industry executive who has worked at both Ford and Tesla said of Musk’s Cybertruck: “However hard it is to make, I think he’ll sell all he can make.”
He added: “In California, everyone wants the hottest, latest thing. It’s going to be the ultimate: look at me. You have the cult of Elon plus the fact that it’s a radically different car. It’s going to draw more attraction than driving a Lamborghini.”
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