Elon Musk, CEO of Tesla, has expressed concerns about the challenges in ramping up production for the highly anticipated Cybertruck electric pickup truck. He also announced that deliveries of the Cybertruck would commence on November 30.
Although Tesla is known for producing electric sedans and sport utility vehicles, it has been absent from the highly profitable and popular pickup truck segment in the United States. The Cybertruck is poised to enter a competitive market, challenging vehicles like Rivian’s R1T, Ford’s F-150 Lightning, and General Motors’ Chevrolet Silverado EV.
During an earnings call, Musk cautioned against high expectations for the Cybertruck, citing potential “enormous challenges” in scaling up production and achieving profitability. He acknowledged that the company had encountered difficulties in the production ramp-up of the truck, which had affected its margins.
Tesla had initially stated its capacity to produce over 125,000 Cybertrucks annually, with a potential increase to 250,000 by 2025, according to Musk. He noted that more than 1 million people had reserved the Cybertruck by making small deposits. However, some analysts expressed skepticism about near-term sales, suggesting that Tesla might not reach the 125,000-vehicle production mark anytime soon.
The automaker is expected to unveil the pricing for the Cybertruck at an event at its Texas factory on November 30. In 2019, Tesla had aimed for a price under $40,000 for the Cybertruck, but the rising prices of battery raw materials in the electric vehicle market have impacted pricing. Rivian’s R1T is priced from $73,000, and the F-150 Lightning starts at approximately $50,000.
Over the past year, electric vehicle demand has experienced a decline due to higher interest rates increasing financing costs and discouraging discretionary spending. In response, Tesla has taken an aggressive approach to reduce car prices, seeking to expand its user base and leverage the future potential of selling its high-margin self-driving software.