CyberTruck pricing more expensive than originally planned (and specs to change) says Musk

[ericpullen]

They don't say specifically what the new cost will be, but I figured the $39,900 truck was never going to happen.

https://www.theverge.com/2022/8/5/23293309/tesla-cybertruck-price-expensive-elon-musk-shareholder

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[PungoteagueDave]

Rivian is losing money on every copy sold, has a production cost over $100k each.

Elon has implied cost for initial production model came in over $125k, so required re-engineering, leading to some of the delays. Basic structure (stainless steel exoskeleton) and battery size alone says this has to be a $125k+ vehicle. Given high weight and claimed range, towing specs, battery would have to be far bigger than Lightning's 131 kw, and given Tesla's sector-leading margin requirements, this feels like a $150k vehicle. Which is why the egg-on-face delay IMO.

Ford hasn't discussed Lightning margins, but we know the Pro is a low-volume (relative to other Lightning models) loss-leader by design, for PR reasons - I bet the Platinum Lightning magins vs ICE Platinum versions are tighter than standard. EVs are still hard to do - batteries are expensive, cost curve has limits, weight remains an issue. I doubt we'll see a CT roll below $75k, and only a few to say "we did that."

 

[greenne]

They don't say specifically what the new cost will be, but I figured the $39,900 truck was never going to happen.

https://www.theverge.com/2022/8/5/23293309/tesla-cybertruck-price-expensive-elon-musk-shareholder

Elon pulling a "bait and switch"..call me shocked!!

 

[Yellow Buddy]

Rivian is losing money on every copy sold, has a production cost over $100k each.

Elon has implied cost for initial production model came in over $125k, so required re-engineering, leading to some of the delays. Basic structure (stainless steel exoskeleton) and battery size alone says this has to be a $125k+ vehicle. Given high weight and claimed range, towing specs, battery would have to be far bigger than Lightning's 131 kw, and given Tesla's sector-leading margin requirements, this feels like a $150k vehicle. Which is why the egg-on-face delay IMO.

Ford hasn't discussed Lightning margins, but we know the Pro is a low-volume (relative to other Lightning models) loss-leader by design, for PR reasons - I bet the Platinum Lightning magins vs ICE Platinum versions are tighter than standard. EVs are still hard to do - batteries are expensive, cost curve has limits, weight remains an issue. I doubt we'll see a CT roll below $75k, and only a few to say "we did that."

I think there’s a wild card in there though. At this point, Tesla is big enough to throw their weight around.

Tesla makes enough margins on other vehicles to absorb a loss or at cost model with the CT. They can then realize profits through up sells with their established software model.

Elon is creative, it wouldn’t surprise me if he ended up selling the CT as a Lego kit for DIY assembly at this point.

 

[Roy2001]

Tesla makes enough margins on other vehicles to absorb a loss or at cost model with the CT. They can then realize profits through up sells with their established software model.

No way Tesla will do that, they will just make high end CT first, like S and X.

But it will be interesting to see EV truck prices as whole. I doubt that $40k price would last as 100kWh battery pack is minimum requirement and it is not cheap. I think new base would be $50k.

I guess Lightning price structure would be adjusted based on that and the new tax credit program that we will see more configurations between $50k and $80k.

 

[Yellow Buddy]

No way Tesla will do that, they will just make high end CT first, like S and X.

They could do that as well. But Elon made it a point to embarrass a Ford when the CT came out. I’m sure he’ll want to embarrass the Lightning when it comes out as well. That means he’s going to need to come up with a way, even if it’s selling a “off menu” CT. That charges $1 per blinker use to beat Fords $40k

 

[PungoteagueDave]

I think there’s a wild card in there though. At this point, Tesla is big enough to throw their weight around.

Tesla makes enough margins on other vehicles to absorb a loss or at cost model with the CT. They can then realize profits through up sells with their established software model.

Elon is creative, it wouldn’t surprise me if he ended up selling the CT as a Lego kit for DIY assembly at this point.

I once had a boss who said "We may lose money on every sale, but we make it up on volume." The fact is that Tesla cannot sell any model, especially a highly anticipated vehicle like the CT, which is expected to be a volume product, for a loss.

Like the initial MS 45 at $39k or a few M3's (or even the Lightning Pro at $39k), they can sell a handful at a loss, but the BASIC structure and battery design has to work at a minimum price point for volume sales - and it looks like those two factors - structure and minimum battery size -alone push it over $100k. Can't get around weight and battery needs.

See the giant pushback from initial Rivian reservation holders when they tried to re-price, just to stem initial losses on upfront sales. Rivian hasn't sold a single truck with a positive gross profit, and it looks like they never will - a true death spiral situation, where the business model and consumer expectations/ability to pay do not coincide. Seems Tesla is up against the same rock and hard place with the CT.

Ford had a huge advantage here - an existing fully-engineered conventional truck platform that it could plug-and-play with overlaid EV engineering that allowed it to leapfrog into the market with Lightning speed. Extremely well-played, enabling time-to-market for the follow-on purpose-built EV trucks that will benefit from seeing everything the competition does while building volume and capacity with the MachE and Lightning.

Tesla is over its skis in my opinion, and I'm happy to temporarily be on the sidelines. Traded in my MX (my fourth Tesla), which was on its fourth set of front half shafts, along with the pictured Powerboost, on the Lightning a couple weeks ago, quite happy to have "de-risked" the garage for now, always have the option to go back if they get their act together. It feels good to be back in a conventional dealer service world where there are real people to talk to, and engineering that responds, fixes things. Full disclosure - I do have a CT reservation, just for optionality, never expected it to become reality, so far justified.

 

[F150ROD]

Im going to say the Base will be the Dual Motor and the last one to be built at $70k. It’ll show up for about a month and then disappear.

I agree that the QUAD will be $100k+

 

[Ford Senior Master]

Ford hasn't discussed Lightning margins, but we know the Pro is a low-volume (relative to other Lightning models) loss-leader by design, for PR reasons - I bet the Platinum Lightning magins vs ICE Platinum versions are tighter than standard. EVs are still hard to do - batteries are expensive, cost curve has limits, weight remains an issue. I doubt we'll see a CT roll below $75k, and only a few to say "we did that."

I think this is why there was so much talk about completely splitting Model E business off from Ford Blue. The way things were engineering and development costs were shared between both segments. That is a huge benefit if Ford can largely avoid having different powertrains for every trim level and model like in the ICE world. Less powertrain combinations equals less engineering teams. Also warranty costs should be exponentially less than current ICE configurations. I would estimate 60-70% of current ICE warranty costs are powertrain related.

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