Tesla’s long-delayed electric pickup truck Cybertruck has finally confirmed the delivery time, but its CEO Elon Musk is not happy. He regards Tesla’s development of Cybertruck as digging his own grave and thinks it will take a long time. It will take time to make money on this car.
Tesla announced on Wednesday that the Cybertruck, which has been delayed for two years, will be delivered at the Texas Gigafactory on November 30 this year. The news briefly reversed the decline in Tesla’s stock price. Earlier, Tesla released its third-quarter financial report. Both revenue and net profit fell short of expectations, causing the stock price to fall.
However, Musk then began to pour cold water on the conference call, making a rare attempt to lower financial expectations for the vehicle. “It’s going to take a lot of work to get Cybertruck to volume production and be cash flow positive at a price people can afford. I just want to lower people’s expectations for Cybertruck. It’s a great product, but from From a financial perspective, it will take a year to 18 months to become a significant positive cash flow contributor,” he said.
“We are digging our own grave in developing Cybertruck. It is difficult for you to bring this rare and special product to the market, achieve mass production, and make a lot of money.” Musk told analysts during a conference call. Musk said that Tesla can ship 250,000 Cybertrucks per year, but it may not be possible until 2025. Currently, Tesla is trial-producing Cybertruck at its Texas factory and can produce 125,000 vehicles per year.
However, Tesla has not announced the specific configuration and price of Cybertruck. Tesla executives say they are laying the groundwork for the opening of a planned new factory in Mexico. But Musk said the company is working to lower the price of its cars before Tesla goes “all in” on building its Mexican factory.
Musk is worried about the high interest rate environment in the United States. He believes that people who buy cars are focused on their monthly payments. “If interest rates remain high, or even higher, it will be much more difficult for people to buy cars.”
In order to reduce the price of cars while maintaining profits, cost control is critical. Musk noted, “The importance of cost cannot be overstated… We have to make our products more affordable so people can afford them.”
Musk also talked about advertising. He noted that many shareholders want Tesla to advertise, and the company is advertising. Tesla currently purchases at least pay-per-click online advertising. Musk noted, however, that it “doesn’t really help” if Tesla ads show people a great car they can’t afford.
