Inventory Build Up and Future Pricing

[PaulWantsACyberTruck]

With the increasing number of cybertrucks piling up on dealership lots, how likely will we see incentives, reduced finance rates and any other discounts for the truck over the next year?

My feeling is that if the price were reduced between 15k and 20k they'd move off the lot faster because these are popular vehicles everywhere.

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[YDR37]

With the increasing number of cybertrucks piling up on dealership lots, how likely will we see incentives, reduced finance rates and any other discounts for the truck over the next year?

My feeling is that if the price were reduced between 15k and 20k they'd move off the lot faster because these are popular vehicles everywhere.

I think we can all agree that Cybertrucks would sell better if prices dropped by $15K or $20K. But this is not going to happen.

For one thing, Tesla is currently taking orders for the "low-priced" RWD Cybertruck, which costs $70K (or $62.5K after the $7.5K federal tax credit). The first RWD deliveries are currently scheduled for July-August. If the AWD Cybertruck (currently starting at $80K) was discounted tomorrow by $15K or $20K, it would be priced lower than the forthcoming RWD Cybertruck, which would make no sense.

It's clear that Tesla overproduced Cybertrucks last year, which is why they still have 2024s (including Foundation Series) in inventory. My guess is that the inventory situation will gradually improve, but not because of price cuts to stimulate demand -- instead, Tesla will cut production and reduce supply. Tesla should release the 2Q 2025 production numbers on July 2, so we should find out then if production is down.

Another factor that could help to clear Cybertruck inventory this year is the (probable) loss of the $7.5K federal tax credit. In the long run, of course, this is bad news for the sales of Cybertrucks (and other EVs). But in the short run, some people will rush to buy in 2025, so they can save $7.5K before the tax credit goes poof.

Bottom line: it's certainly possible that we could see some end-of-quarter incentives on Cybertrucks in June 2025, like the 1.99% APR financing deal that was offered in March. But I don't expect to see any new discounts. The inventory situation will gradually improve, even without discounts, as Tesla cuts back on production.

 

[sefar]

New trucks won't sell when so many low mileage used ones are available cheap. What Tesla is offering for a CT in trade depresses the market further, as they will offer the trade ins for even less. It's fortunate that I like mine as may have to pay to get it hauled off when I'm done with it.

Barring a significant advance in FSD or some other big step firward including public sentiment returning favorable, I am concerned that the CT might not see a third year of manufacturing.

 

[BeFamousVideo]

New trucks won't sell when so many low mileage used ones are available cheap. What Tesla is offering for a CT in trade depresses the market further, as they will offer the trade ins for even less. It's fortunate that I like mine as may have to pay to get it hauled off when I'm done with it.

Barring a significant advance in FSD or some other big step firward including public sentiment returning favorable, I am concerned that the CT might not see a third year of manufacturing.

It hadn't occurred to me that CT may not get produced on year 3. But this is a real possibility if inventory doesn't move.
Tesla might sell more if they were painted rather than wrapped. It's surprising how much the truck almost blends in when wrapped compared to SS shine look.
Of course pricing is a factor too. Although so many cars and trucks have prices approaching or exceeding $100k now.

 

[YDR37]

Barring a significant advance in FSD or some other big step firward including public sentiment returning favorable, I am concerned that the CT might not see a third year of manufacturing.

It hadn't occurred to me that CT may not get produced on year 3. But this is a real possibility if inventory doesn't move.

I've argued before that it makes sense to keep the Cybertruck in production, even at low volumes, as long as Tesla is not actually losing money on it. Even if the profits are small, a small profit is better than nothing. And the Austin TX factory, where CTs are manufactured, is running well under capacity, so the CT is not consuming resources that would be better allocated to other models.

The same arguments would apply to Models S and X. Both of those models sell at even lower volumes than the CT, yet Tesla has kept them in production.

 

[Mini2nut]

Now with Elon back on the Tesla saddle we may see some Cybertruck price adjustments.

I was almost positive that the new RWD trim would be priced at $60,990. I was bummed when they announced $70k.

 

[YDR37]

I've argued before that it makes sense to keep the Cybertruck in production, even at low volumes, as long as Tesla is not actually losing money on it.

Now, one wrinkle that could affect this analysis is: Model Y sales. Why does that matter?

Tesla has two factories in the US: Fremont CA and Austin TX. The Fremont plant is older and larger. It makes Models S, 3, X, and Y -- in other words, everything but the CT.

The Austin plant is smaller, and opened recently in April 2022. It only makes the Model Y and the CT -- but mostly the Model Y, which is Tesla's best seller.

According to Tesla, the Fremont plant has capacity to make more than 550,000 Models 3/Y (combined) per year. In 2024, Tesla sold an estimated 562,516 Models 3/Y in the US (not including some more sold in Canada). If Tesla's North American sales continue to decrease in 2025, there may come a point where Tesla no longer needs two factories for S3XY production. Tesla could make all the S3XYs for North America in Fremont -- which is exactly what they did before April 2022.

And if Tesla can consolidate all S3XY production in Fremont, then they might not keep the Austin factory open just to manufacture a trickle of CTs. It's possible that cost savings could be maximized by closing the Austin plant entirely, even if this means sacrificing further CT production.

 

[sefar]

I've argued before that it makes sense to keep the Cybertruck in production, even at low volumes, as long as Tesla is not actually losing money on it. Even if the profits are small, a small profit is better than nothing. And the Austin TX factory, where CTs are manufactured, is running well under capacity, so the CT is not consuming resources that would be better allocated to other models.

The problem with that argument is the idle equipment in Austin could be retooled for something that sells better. It wasn't that long ago that GM abandoned some entire brands rather than waste capacity. Some of those were models sold under several brands, but a few Pontiacs (like the sky) only sold under one brand bit not enough to justify the factory dedicated to them.

If Tesla isn't selling all it can currently make of a model that is profitable, there is less pressure to retool the Texas factory. Currently I don't think anything is selling enough to call the question.

 

[PaulWantsACyberTruck]

Now with Elon back on the Tesla saddle we may see some Cybertruck price adjustments.

I was almost positive that the new RWD trim would be priced at $60,990. I was bummed when they announced $70k.

And that originally promised $39,999 never came out. IF both the RWD and AWD were in the low to mid 50's I am confident sales would increase signifantly.

I realize its easier said than done, but when we think about EVs and market share, pricing them comparably with ICE vehicles more adoption would be possible.

 

[Mini2nut]

Now, one wrinkle that could affect this analysis is: Model Y sales. Why does that matter?

Tesla has two factories in the US: Fremont CA and Austin TX. The Fremont plant is older and larger. It makes Models S, 3, X, and Y -- in other words, everything but the CT.

The Austin plant is smaller, and opened recently in April 2022. It only makes the Model Y and the CT -- but mostly the Model Y, which is Tesla's best seller.

According to Tesla, the Fremont plant has capacity to make more than 550,000 Models 3/Y (combined) per year. In 2024, Tesla sold an estimated 562,516 Models 3/Y in the US (not including some more sold in Canada). If Tesla's North American sales continue to decrease in 2025, there may come a point where Tesla no longer needs two factories for S3XY production. Tesla could make all the S3XYs for North America in Fremont -- which is exactly what they did before April 2022.

And if Tesla can consolidate all S3XY production in Fremont, then they might not keep the Austin factory open just to manufacture a trickle of CTs. It's possible that cost savings could be maximized by closing the Austin plant entirely, even if this means sacrificing further CT production.

I read somewhere that the Austin plant is running at 30% of capacity. Tesla has significantly cut back on CT production at the plant due to demand.

 

[YDR37]

I read somewhere that the Austin plant is running at 30% of capacity. Tesla has significantly cut back on CT production at the plant due to demand.

According to Tesla, their "Current Installed Annual Vehicle Capacities" in North America are as follows:

100,000 Models S/X in Fremont
>550,000 Models 3/Y in Fremont
>250,000 Model Y in Austin
>125,000 Cybertruck in Austin

Add those up, and the total capacity for North America is >1,025,000 units. But the use of the ">" symbol shows that these are lowball figures; the actual capacity is higher. The analysts think that Tesla actually could produce around 1,300,000 to 1,400,000 units annually with the existing US facilities, if demand was there.

In 2024, Tesla sold an estimated 633,762 vehicles in the US. Add another 10% for Canada, and let's call it 700,000. That's well below US production capacity, whether you use Tesla's lowball numbers or the higher analyst estimates. The analyst estimates imply that Tesla was only using around 50-55% of production capacity in 2024. And so far, 2025 is not looking better.

In March, Elon announced that Tesla would double its US vehicle production over the next two years, as "an act of faith in America". That may sound bold, but it doesn't actually mean new factories, or major expansions of the existing factories. Tesla could double production simply by boosting the factory utilization rate, from around 50% to 100%.

I don't actually expect Tesla to double US production in two years, because I doubt that demand for Teslas will double. But I will acknowledge that it's theoretically possible, given the surplus production capacity.

 

[hemiarch]

So where are these cheaply available second hand Cybertrucks I keep hearing about?
Go look for one at the price Tesla is offering for trade in. I challenge you to find even one.
No. They are still about 70-75k used.

 

[YDR37]

So where are these cheaply available second hand Cybertrucks I keep hearing about?
Go look for one at the price Tesla is offering for trade in. I challenge you to find even one.
No. They are still about 70-75k used.

Used CTs are now available for a bit less than $70K. For example, Autotrader currently has 17 listings for used CTs in the $67,999 to $69,991 range.

But even so, I agree with you that used CTs are not particularly cheap. Maybe the used prices will fall in July-August after the RWD CT becomes available ($70K new, or $62.5K with tax credit).

 

[ABILISK]

I doubt FS will ever get cheaper. It’s already about the price of a NFS with FSD added. I’m seeing ~89K for AWDs and 108K for Beasts. Plus you get lifetime supercharging and premium connectivity, accessories, etc. There isn’t a better deal out there right now and probably won’t ever be.

 

[hemiarch]

I doubt FS will ever get cheaper. It’s already about the price of a NFS with FSD added. I’m seeing ~89K for AWDs and 108K for Beasts. Plus you get lifetime supercharging and premium connectivity, accessories, etc. There isn’t a better deal out there right now and probably won’t ever be.

Agree with that. If I didn’t have a bunch of customizations on my current car I don’t want to pay for again, I’d be getting the FS AWD with free SC

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