Tesla’s Cybertruck: A Production Challenge for Musk?

Elon Musk is expressing concerns about Tesla Inc.’s future, even before the release of the Cybertruck. While its stainless steel body is incredibly durable, assembling the panels will be a challenging task. The Cybertruck will be Tesla’s inaugural high-voltage vehicle, allowing for quicker charging, but it also comes with potential drawbacks. Additionally, it is the only Tesla product relying on in-house battery cells that are significantly delayed.

In these and other respects, the Cybertruck is a big step back compared to how Tesla has progressed in its car manufacturing. The last vehicle Musk talked about in the way he described the Cybertruck was the Model X, a sport-utility vehicle that has never achieved high volume because of what its CEO described as arrogance on several occasions.

“The Model X kind of became a technology sled for every great thing we could imagine at once,” Musk said of the SUV in May 2017. “It’s a terrible strategy. You really want to start simple and add things over time.”

Emphasizing simplicity and making the design easier to manufacture served Tesla well with its next product, the Model 3 sedan and the successful Model Y SUV that followed. The two were the first electric vehicles to break into the mainstream, making Tesla by far the most valuable automaker and its CEO the richest man in the world.

Musk noted when the Model 3 went into production in 2017 that it wouldn’t have “all the bells and whistles” like the Model X, which had double-hinged doors and floating second-row seats.

Last month, in the same earnings call in which Musk referred to Tesla digging its own grave, he warned that the Cybertruck “has a lot of bells and whistles.”

Tesla may eventually overcome the enormous challenges described by its CEO by producing the Cybertruck in large quantities without breaking the bank. But Musk himself has estimated that this will take 12 to 18 months of “blood, sweat and tears.” He also said Tesla likely wouldn’t reach annual production of 250,000 Cybertrucks until sometime in 2025.

Before the company began Cybertruck deliveries on Nov. 30, one analyst has gone so far as to suggest the company should cancel the vehicle, saying it would likely be positive for Tesla stock.

“When Elon Musk says it’s going to be tough, listen,” said Stephanie Brinley, vice president of S&P Global Mobility.

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Musk has called the Model X “the Fabergé egg of cars,” referring to the rare symbols of luxury made from precious metals and gemstones. “Probably nothing like this will ever be done again, and maybe we shouldn’t,” he said in January 2019.

Ten months later, Musk took the stage at Tesla’s design center just outside Los Angeles and told fans that pickup trucks had all looked more or less the same for the last century. The company wanted to try something different, he said.

Minutes later, a vehicle rolling onto the stage through smoke, flashing lights and fireballs filled the CEO’s bill, based on the sci-fi film Blade Runner. The Cybertruck’s triangular roof, angular exterior, and transparent metal glass that shattered in the botched demo immediately became the stuff of memes.

Tesla began taking deposits for the truck and starting marketing prices ranged from $39,900 to $69,900. The company initially said deliveries would begin in late 2021 at the earliest. Around the time it was supposed to start delivering pickups to customers, Tesla removed the Cybertruck’s pricing and specs from its website and hasn’t put them back up since.

Stainless steel

A major reason it took the company two years longer than expected to begin deliveries was a decision to coat the vehicle with a very hard stainless steel alloy, which Musk said his rocket company SpaceX would also use on Starship, its launch vehicle designed to one day reach Mars. .

Although stainless steel resists corrosion and does not need to be painted, it can be expensive and difficult to shape and weld together. It also tends to be heavier than the steel commonly used in most car and truck bodies.

In late August — three months before Tesla was scheduled to begin deliveries — Musk wrote an email to Tesla employees that was leaked to an online forum. “Due to the nature of the Cybertruck, which is made of bright metal with mostly straight edges, any dimensional variation sticks out like a sore thumb,” the CEO noted. He mandated that all parts of the vehicle be designed and built to an accuracy of less than 10 microns, or 10 millionths of a meter.

When Tesla chief designer Franz von Holzhausen showed up at an auto enthusiast event in Southern California earlier this month with a Cybertruck prototype, pictures quickly emerged showing misaligned fender flares and panel gaps wide enough to fit a finger through.

“The obvious problems with the Cybertruck are problems with the concept itself,” said Eric Noble, president of The CarLab, an automotive product and design consultancy. “The market didn’t demand a stainless finish, a weird bed configuration, a weird roofline, or a weird side view. These are all answers to a question the pickup truck market didn’t ask.

800 volt architecture

Tesla announced last month that it would adopt an 800-volt architecture for the Cybertruck, citing the cost savings it would bring to heavy-duty vehicles.

This is a first for the company for consumer vehicles, although it is not uncharted territory. Porsche brought an 800-volt system to the market with the Taycan electric sports car in 2019. Hyundai has also offered one for the Ioniq 5 model, allowing the SUV to pick up electricity faster.

Although other manufacturers have discontinued it, there are risks and costs associated with switching.

“You’re changing a lot of things — charging infrastructure, through the entire vehicle system,” Drew Baglino, Tesla’s executive vice president of powertrain and energy, said in April 2022.

“The benefits are small and the costs are high,” Musk added on the same earnings call. “After a year, does it make sense to switch to an 800-volt architecture? Likely. But it needs a really large number of vehicles to cover the cost of switching from 400 volts to 800 volts.

4680 cells

Another risk factor for Cybertruck is related to the batteries.

In September 2020, Musk held an event to showcase several innovations developed by Tesla, including thicker and more spacious cells. Baglino said at the time that the company would get a 16% boost in range from the new shape alone (its 4680 batteries are 46 millimeters in diameter and 80 millimeters tall).

Tesla has struggled to ramp up production of the 4680 battery, which in turn has held back products including the Cybertruck and Semi. Nearly a full year after it hosted a delivery event for the Semi a year ago, the company is still making the vehicle in small numbers, analysts at Deutsche Bank wrote in a Nov. 14 report only for PepsiCo Inc., its original customer. citing meetings with Tesla’s head of investor relations.

When asked on last month’s earnings call how many Cybertruck deliveries he expected in 2024, Musk balked.

“If you want to do something radical and innovative, and something really special like the Cybertruck, it’s very difficult because there’s nothing to copy,” he said. “You don’t just have to invent a car, you have to invent a way to make a car. So the more uncharted territory, the less predictable the outcome.”