Tesla tells workers on Cybertruck line to take 3 days off

[AlDente]

Huh? Tesla has a very good idea what the Total Addressable Market is for the Cybertruck and, like all their vehicles, it's a function intertwined with cost to produce. Unlike legacy truck makers, Tesla is not willing to sell it at a loss of tens of thousands of dollars for each truck they make.

Tesla knows that the more they make, the less it will cost, which is why they have been studying the design of the production lines involved for efficiency and speed optimizations. A production line is never a single line, particularly at at Tesla which is more vertically integrated than other automakers. There are multiple production processes that all feed the main final assembly line.

Tesla goes into production when they can configure a production line that makes sense. As processes and potential bottlenecks are better understood, they adjust the processes for speed and efficiency. This allows them to increase the production rate with fewer line workers and bring the cost per vehicle down over time.

The Model 3 went through this same dynamic. They even added a new production line inside a tent to get volumes where they needed to be to reach the right price point. Demand is very sensitive to price point.

The Model 3 started initial production in the summer of 2017 but had a very slow ramp due to over automation that wasn't working as seamlessly as planned. They had to re-configure the production line and processes multiple times before they could sell them profitably and at a low enough price that they could also sell them in very high volumes. As production volumes increased, the "pinch point" was the last 3-4 months of 2018, almost a year and a half after production started. That's because it costs time and money to achieve volume efficiencies, the payback comes when you can just run the production line and not mess with it.

The Cybertruck is designed to be easier to build due to extensive use of aluminum castings that are so consistent from part to part they can function as their own assembly jigs, a new kind of network using different wiring and different connectors (but less computers and less wiring/connectors), lack of a paint shop for final body finishing and a structure designed to assemble with fewer steps, fewer robot welders, leading to more cost effective assembly.

However, these optimizations are exactly why Elon planned a slow and gradual ramp for the Cybertruck. Anytime you make a clean sheet design, especially when increasing the content of new construction techniques significantly, there will be longer optimization curves, than if you make essentially the same car with 20 more hp that is an inch longer, has new color options, different tire sizes, and has redesigned styling flourishes inside and out (but uses all the same production technologies). Legacy auto might even slap on a new model name even though the underlying technology and assembly processes have not changed.

In the case of the Cybertruck, Tesla is challenging traditional automaking processes in fundamental ways. That comes with special challenges with regard to optimizing the production line, for example, the learnings around production of the stainless parts and how they feed into the general assembly line. Like how to best route and install a new kind of wiring. Everything must be optimized for speed and efficiency so the line can operate reliably with fewer line workers.

And we know Tesla is succeeding relative to legacy auto EV truck production because Tesla announced they hit Cybertruck net profit in Q3 2024 while legacy auto still sells their EV trucks at losses amounting to tens of thousands of dollars for every truck produced (even though they have been in production for more model years)!




Tesla's business plan is to make the trucks increasingly more affordable as production rates increase. That has been the plan all along, even though Cybertruck will not hit $39.9K, $49.9K and $69.9K without scary levels of deflation, combined with a serious de-contenting of the exceptional features the Cybertruck currently comes with at no extra charge.

Features like the best sounding audio in the segment, adjustable ride height with a massive 8" range of adjustment, adjustable compression and rebound damping that automatically adjusts on the fly to suit loads and conditions, steer-by-wire, combined with four-wheels that steer, to provide the easiest and most nimble manuevering in the segment, the most damage resistance of any truck on the market, the most rust resistance of any truck on the market, an automatic, self-disappearing, all-metal, tonneau cover that a 300 lb. man can walk on (and that encloses the largest volume truck bed in the segment), etc. etc, These features come even with the lowest spec $79.9K Cybertruck without FSD. And that is the price that will lower as efficiencies increase, but it we had better hope it never hits the announced prices because that would imply a devestating level of deflation (combined with de-contenting).

Looked at objectively, the $79.9K Cybertruck offers more value than a legacy EV or gas truck at the same price point, but there has been such a cacophony of false narratives and fake news that most traditional truck buyers still have no clue how much value the Cybertruck actually has. Most of them still think it is a highly flawed, fragile car pretending to be a truck that rusts easily and breaks down regularly. They simply are ignorant. That will not be fixed by expensive multi-million-dollar advertising campaigns, it will be fixed by firsthand exposure, butts in seats, testimonies from trusted friends, co-workers and family members. And that takes time. Remember, it hasn't even been a full year since it was made in any significant numbers. People still don't even know exactly what they are looking at, and how good it is.

The Cybertruck is already the best-selling EV truck in the world (fake news reports to the contrary), and 2025 is going to be a record-breaking year for Cybertruck sales and Tesla is already gearing up for exactly that. Watch and see.

By 2026-2027 contractors will figure out they can send their Cybertruck to Home Depot (without an employee in it) and have the friendly Contractor Support Team at HD load their truck with the needed supplies,charge their account, and send it on their way. Ford and GM have nothing like it.

Yep, it's going to sell in great numbers! This is not 'hopium' talking, it's common frickin' sense, but only if you already know what a great truck the Cybertruck actually is, and how much value it offers buyers. Some of us already know that, most do not.

That was easily the most content rich post of the day. Outside of your pure fantasy about 2026-27 FSD robot CT's, you forgot that Tesla is actually very concerned by the take rate of the now exhausted 2M res holders and they are scrambling to try and determine what exactly the real TAM is for this "unique" vehicle. As one of the legion of no thanks res holders, I will say the 2 main reasons I'm not driving one right now are:

1. They made the FS a stupid 100% over the original price estimates.

2. In order to have the CT fit in a standard garage they chopped the nose off leaving an imbalanced even weirder looking thing with a useless frunk and a unnecessarily long bed.

The Rivian bed length would have been fine considering a lot of current CT owners are SM "Influencers", not contractors. While some astute business owners are using the Cybertruck for work type functions I'm pretty sure any BEV pickup truck would have accomplished the same fuel and maintenance cost savings. I guess they consider the odd looks factor of the CT as getting attention and any attention is better than none. You might mention that many owners now report receiving more negative comments but hey if you love it and it works for you so be it. I drove one and it was nice to drive but I'm pretty sure my next vehicle will not be stainless steel nor, the curious rolling wedge of cheese shape that was so fresh looking in 2019.

Much to the chagrin of many here, I'm actually a multi Tesla owner and a fan of and investor in the company. Everybody makes mistakes and although the jury may still be out, I'm thinking the Cybertruck will be more Edsel than Model Y ...

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[YDR37]

And we know Tesla is succeeding relative to legacy auto EV truck production because Tesla announced they hit Cybertruck net profit in Q3 2024 while legacy auto still sells their EV trucks at losses amounting to tens of thousands of dollars for every truck produced (even though they have been in production for more model years)!

Tesla did state that Cybertrucks were being produced at a profit in Q3 2024. However, Foundation Series pricing applied at that time -- $100K for AWD and $120K for Cyberbeast. Average selling price would have been somewhere in the middle, probably closer to AWD, because AWDs probably sold better. Let's say $107K.

The FS is still available in the US, and it's the only option in Canada and Mexico. But most CT sales now are probably non-FS, at significantly lower prices of $80K and $100K. Average non-FS price is probably somewhere around $87K.

Tesla has not yet made any statements regarding the profitability of non-FS CTs. It's certainly possible that Tesla is still selling CTs at a profit, but even if that's the case, it also seems likely that their profits on $87K CTs are lower than those achieved for $107K CTs in 3Q 2024.

 

[AlDente]

FSD being years late is only a problem if someone beats you to it. No one else is even close.

I can't believe anyone really using FSD is convinced it is anywhere close to level 4 let alone level 5 autonomy. I dove over 200 miles with family on board yesterday and there were many "interventions". Some were only annoying but a few were inexplicable, downright dangerous moves that could have caused accidents if I wasn't paying constant driver level attention. They may get there with FSD but as of today, the product should still be using the BETA description. IMHO

 

[Mini2nut]

Tesla needs to lower their COGS and MSRP in order to keep the Cybertruck assembly line humming and increase sales. The $80k + price point is a barrier to entry and is limiting sales volume.

Some of the strategies could include assembly line efficiencies, asking for better pricing from vendors and making some standard equipment such as the powder coated vault cover, tow hitch, killer sound system and heated and cooled seats optional.

Forbes today…

Cheaper Cybertruck
“While not a certainty, a rear-wheel-drive version of the Cybertruck could arrive in 2025. As recently as a few months ago, Tesla was selling a $60,990 RWD model (it was taken down in August). That’s almost $19,000 less than the least expensive AWD Cybertruck($79,990) currently on the Cybertruck page. “Making more affordable versions [of the Cybertruck] available could help sustain momentum,”Stephanie Brinley, an analyst at S&P Global Mobility, told me in an email earlier this year. Also expect the arrival of a range extender option for the existing models, which could push the range up to 445 miles.”

 

[HaulingAss]

Tesla did state that Cybertrucks were being produced at a profit in Q3 2024. However, Foundation Series pricing applied at that time -- $100K for AWD and $120K for Cyberbeast. Average selling price would have been somewhere in the middle, probably closer to AWD, because AWDs probably sold better. Let's say $107K.

The FS is still available in the US, and it's the only option in Canada and Mexico. But most CT sales now are probably non-FS, at significantly lower prices of $80K and $100K. Average non-FS price is probably somewhere around $87K.

Tesla has not yet made any statements regarding the profitability of non-FS CTs. It's certainly possible that Tesla is still selling CTs at a profit, but even if that's the case, it also seems likely that their profits on $87K CTs are lower than those achieved for $107K CTs in 3Q 2024.

I totally agree with your analysis. What we don't know is how and when Tesla has been able to lower the cost of production through decreased scrap, decreasing prices of many core commodities (like lithium), increased line efficiencies, etc. These purchase contracts cover longer timeframes to minimize price disruptions, so many of the price decreases are just now being realized.

My best guess is that Cybertruck is roughly at break-even now. This is actually incredibly bullish for the future of Cybertruck considering that no other electric pickup is even close to that. Further, when you consider that the Cybertruck is already selling in higher volumes than any other electric pickup, it just highlights how wide the gulf is between the Cybertruck and those that cost tens of thousands more to manufacture than they can be sold at.

 

[HaulingAss]

Tesla needs to lower their COGS and MSRP in order to keep the Cybertruck assembly line humming and increase sales. The $80k + price point is a barrier to entry and is limiting sales volume.

Some of the strategies could include assembly line efficiencies, asking for better pricing from vendors and making some standard equipment such as the powder coated vault cover, tow hitch, killer sound system and heated and cooled seats optional.

Tesla will NEVER make the tonneau cover optional, it's too integral to the functionality of the Cybertruck and what sets it firmly above the competition. It's the only truck I'm aware of that has a tonneau cover that completely dissappears out of the way when it is not being used.

It also adds considerable efficiency/range without having to make the truck heavier and more expensive with more batteries to compensate for the drag.

Finally, it's more theft resistant than all other fold-up tonneau covers. When you have many thousands of dollars' worth of tools, equipment or sporting goods under there, it's nice to know it can't be easily pried open like most tonneau covers can be.

 

[HaulingAss]

I can't believe anyone really using FSD is convinced it is anywhere close to level 4 let alone level 5 autonomy. I dove over 200 miles with family on board yesterday and there were many "interventions". Some were only annoying but a few were inexplicable, downright dangerous moves that could have caused accidents if I wasn't paying constant driver level attention. They may get there with FSD but as of today, the product should still be using the BETA description. IMHO

I've got news for you. It's not using the BETA designation, it's using the Supervised designation. As in its stil a driver's aid.

It's unclear why you think that is not accurate.

 

[AlDente]

I've got news for you. It's not using the BETA designation, it's using the Supervised designation. As in its stil a driver's aid.

It's unclear why you think that is not accurate.

Thanks for that "news". I'm well aware that the Beta designation was dropped in March this year by the fearless leader when the FSD take rate was horrible and he thought FSD was finally beyond the BETA phase. I believe that the Supervised designation was created by fearless leader to increase take rate which is I suppose, part of his fiduciary duties to Tesla. My comment is simply that the software originally deployed in October of 2020 still seems like BETA software 4 years later. That's a pretty long Beta phase for any software ... even one as complicated and difficult as FSD.

 

[HaulingAss]

Thanks for that "news". I'm well aware that the Beta designation was dropped in March this year by the fearless leader when the FSD take rate was horrible and he thought FSD was finally beyond the BETA phase. I believe that the Supervised designation was created by fearless leader to increase take rate which is I suppose, part of his fiduciary duties to Tesla. My comment is simply that the software originally deployed in October of 2020 still seems like BETA software 4 years later. That's a pretty long Beta phase for any software ... even one as complicated and difficult as FSD.

The way I see it, and anyone who thinks of this critically, is that "supervised" is more accurate and descriptive than "BETA". Because it makes it more clear to the slow thinkers of the world that it's not ready to drive unsupersived. Not everyone knows what "beta" means. Everyone knows what "supervised" means.

It's not clear to me why you are trying to throw shade on Tesla simply because they came up with a more descriptive, more easily understood term.

 

[TyPope]

I use the whole bed. Wouldn't have bought it if it had a Rivian sized bed. I mean, they are small.

 

[Deleted member 17810]

I wouldn't be surprised if at this point they scrap the cheaper CT. I don't think they can cut enough fat off the CT.

as an aside: if you remove the factory costs, the cts are in the black.

 

[AlDente]

I wouldn't be surprised if at this point they scrap the cheaper CT. I don't think they can cut enough fat off the CT.

as an aside: if you remove the factory costs, the cts are in the black.

With that example, Rivian, Ford and Chevy BEV's might actually be built profitably. Since factory build costs plus factory overhead are part of the COGS equation removing them only produces an inaccurate COGS number which of course is an agreed upon measure of profitability.

 

[AlDente]

The way I see it, and anyone who thinks of this critically, is that "supervised" is more accurate and descriptive than "BETA". Because it makes it more clear to the slow thinkers of the world that it's not ready to drive unsupersived. Not everyone knows what "beta" means. Everyone knows what "supervised" means.

It's not clear to me why you are trying to throw shade on Tesla simply because they came up with a more descriptive, more easily understood term.

As a critical (fast) thinker yourself, I'm not surprised by your low opinion of peoples understanding of words.

Re throwing shade, as a Tesla shareholder (very happy at the moment) I simply express my non-critical derived thoughts with no desire to diminish Tesla. Hope that clears it up for you.

 

[Deleted member 17810]

With that example, Rivian, Ford and Chevy BEV's might actually be built profitably. Since factory build costs plus factory overhead are part of the COGS equation removing them only produces an inaccurate COGS number which of course is an agreed upon measure of profitability.

Yes. None of these companies are "losing" money per vehicle.

 

[AlDente]

Yes. None of these companies are "losing" money per vehicle.

Their shareholders will be happy to hear that ...

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