Ogre
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This is another bit of the transcript which I think is widely mis-understood. Musk is talking about the challenges of the Cybertruck and he mentions that making it affordable is one of the biggest challenges. This answer also confirmed Musk‘s previous estimate about planned volume for the Cybertruck at 250,000 units.
We’ve all seen the crazy tech they are trying to cram into it, but fundamentally I think it sounds like Musk is trying to keep the truck grounded. The big reason? Because while he’s talking about affordability he’s putting it into context here.
So we need to work backwards from here. How much would the Cybertruck need to sell for in order to move 250,000 trucks a year after their initial backlog? That’s his **minimum** expectation and very likely the scale they will want and need in order to get the margins they are looking for.
Toyota has the “Premium” pickup and reputation for having crazy high truck prices, and prices on the Tundra range from about $35,000 to about $57,000 (likely around $75k with options). Across the whole Tundra line, Toyota only sells about 84,000 trucks per year. I think that sets a pretty good baseline for what the Cybertruck will cost.
The trucks which actually sell more than 250,000 units per year are significantly less expensive than the Tundra. There are no 250,000 unit/ year trucks which sell for $100,000, not even remotely close.
There is absolutely going to be a premium attached for the fact that it is an electric truck, but if they are going to hit that sales number, it is not going to be double the cost of otherwise comparable trucks.
We’ve all seen the crazy tech they are trying to cram into it, but fundamentally I think it sounds like Musk is trying to keep the truck grounded. The big reason? Because while he’s talking about affordability he’s putting it into context here.
“…if it's not affordable, that will constrain people's ability to buy it because they don't have the money… Aspirationally, we'd like it to go, in terms of just a rough order of magnitude, we'd like Cybertruck to be at least on the order of a quarter million vehicles a year. But it will take us a moment to get to that level.”
So we need to work backwards from here. How much would the Cybertruck need to sell for in order to move 250,000 trucks a year after their initial backlog? That’s his **minimum** expectation and very likely the scale they will want and need in order to get the margins they are looking for.
Toyota has the “Premium” pickup and reputation for having crazy high truck prices, and prices on the Tundra range from about $35,000 to about $57,000 (likely around $75k with options). Across the whole Tundra line, Toyota only sells about 84,000 trucks per year. I think that sets a pretty good baseline for what the Cybertruck will cost.
The trucks which actually sell more than 250,000 units per year are significantly less expensive than the Tundra. There are no 250,000 unit/ year trucks which sell for $100,000, not even remotely close.
There is absolutely going to be a premium attached for the fact that it is an electric truck, but if they are going to hit that sales number, it is not going to be double the cost of otherwise comparable trucks.
Martin Viecha
Thank you. And the next question is, what are the biggest obstacles for Cybertruck volume production besides battery shortage?
Elon Musk -- Chief Executive Officer and Product Architect
Batteries will probably not be the limiting factor in Cybertruck production. There's a lot of new technology in the Cybertruck that will take some time to work through. And then, there's a question of like, what's the average cost of Cybertruck and to what degree is that affordable? You know, there's -- you can make something infinitely desirable, but if it's not affordable, that will constrain people's ability to buy it because they don't have the money .I worry more about like how do we the Cybertruck affordable despite having awesome technology. That's the thing that will really set the rate.
Aspirationally, we'd like it to go, in terms of just a rough order of magnitude, we'd like Cybertruck to be at least on the order of40 quarter million vehicles a year. But it will take us a moment to get to that level.
This transcript is again from The Motley Fool. I made a slight edit to their transcription which is obvious in red above. I had to re-listen to the audio because I was pretty certain Musk didn’t say they were planning on making “40 million“ Cybertrucks a year.
Thank you. And the next question is, what are the biggest obstacles for Cybertruck volume production besides battery shortage?
Elon Musk -- Chief Executive Officer and Product Architect
Batteries will probably not be the limiting factor in Cybertruck production. There's a lot of new technology in the Cybertruck that will take some time to work through. And then, there's a question of like, what's the average cost of Cybertruck and to what degree is that affordable? You know, there's -- you can make something infinitely desirable, but if it's not affordable, that will constrain people's ability to buy it because they don't have the money .I worry more about like how do we the Cybertruck affordable despite having awesome technology. That's the thing that will really set the rate.
Aspirationally, we'd like it to go, in terms of just a rough order of magnitude, we'd like Cybertruck to be at least on the order of
This transcript is again from The Motley Fool. I made a slight edit to their transcription which is obvious in red above. I had to re-listen to the audio because I was pretty certain Musk didn’t say they were planning on making “40 million“ Cybertrucks a year.
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