Cybertruck, best selling electric pickup truck in just two quarters. First delivery on Thursday, November 30, 2023, my 85th. birthday present.
The Tesla Cybertruck is becoming the U.S. best-selling all-electric pickup truck. Because the manufacturer does not report the results of individual models, we can’t say for sure, but some data indicates that the Cybertruck won in the second quarter of 2024.
While people worry about PE ratios, margins, competition, Delaware judges, and whatnot, I believe the core issue is cashflow. While Tesla is mostly a tech company, unlike pure software, Tesla is very capital intensive, which just got worse with the brute force compute required for AI, the core driver of Tesla’s future businesses. Unlike X, which had to get new funding, Tesla is able to fund from free cashflow. And if the stock price goes crazy enough, it can resort to secondary issues like it did in 2020 with little if any real stock dilution.
Over the weekend, Tesla halted orders for the rear-wheel drive (RWD) version of the Cybertruck, which came in at around $61,000 and offered 250 miles of range. Now the “cheapest” Cybertruck on sale is the $99,990 all-wheel drive (AWD) version, with a range of 318 miles…
“Right now, I think what has happened is that most of the people that reserved have decided that they didn’t want the truck at the higher price and reduced capability,” Abuelsamid said to Yahoo Finance, referring to the fact that when the Cybertruck was announced, it had better features and more attractive pricing. “Thus when it came time to convert reservations to firm orders, it seems a majority have canceled.”
Dropping lower priced models, to force people to buy more expensive models, as been the industry tactic, especially at GM and Ford, for several years now.
Saw my third Cybertruck today. Previously saw a stainless steel one in Plymouth, and another in Dearborn. Today, I saw an orange one in Plymouth. Amazing what you can get away with when your customers are members of a cult.
I think it might be worse than that. Tesla reported a million pre-orders. If a reasonable fraction of those had converted to firm orders, that should have created a backlog lasting for several years. Tesla has sold about 11,000 by end of Q2, for reference.
Yet, you can order Cybertruck in mid-level trim for immediate delivery, and the high end model is about three months out. Base model has been canceled. It seems that there is effectively little to no backlog.
The problem seems to be that when the Cybertruck was announced, it had a lower price point and more features than what was ultimately delivered. It appears a huge fraction of those pre-orders simply canceled when they found out they were getting less vehicle than they thought. By “huge fraction” I mean almost all of them.
So if we’re already through the backlog, the organic demand doesn’t seem to be very high. This could be a problem because Tesla was planning on 200,000 units a year. That number might be off by an order of magnitude.
