Musk on Affordable Electric Truck

[JollyRoger]

I think the level of inflation will force them to raise the price

That link is a bit biased. The article forgets mentioning the already astronomical customer demand and long wait times. Nah, obviously Tesla is not profitable and "forced" to raise prices due to inflation and supply shortages where the US EV credit is required to support global demand.

I dont think Tesla will shit on the preorders. The first model on sale will be the quad-version, available to anyone willing to upgrade. Less expensive versions will follow and perhaps the 39k version may be indefinitely delayed.

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[Ogre]

I think the level of inflation will force them to raise the price of the CT 15%. I don't see Tesla lowering the price of their current fleet in the next few years with demand remaining as strong as it is. https://joinyaa.com/guides/tesla-price-increases/

The article you linked suggests Tesla prices are going up because of the EV incentives…. Which never materialized. By the logic in that article a good chunk of the justification for Tesla increasing prices is gone.


Though I wouldn’t rule out an actual inflation adjustment either. It’s going to be an interesting year.

 

[anionic1]

I think the level of inflation will force them to raise the price of the CT 15%. I don't see Tesla lowering the price of their current fleet in the next few years with demand remaining as strong as it is. https://joinyaa.com/guides/tesla-price-increases/

I do a lot of estimating. Some of it for car manufacturers. The last two years have seen at least 20% increase in cost period. Across the board on all projects. The CT will increase in cost. Also the gas and oil craziness is only going to create more EV demand.

I saw a Rivian today and if people are willing to pay $70k plus for that truck the CT can easily get more.

 

[EV Rob]

I think the level of inflation will force them to raise the price of the CT 15%

Inflation doesn't stop unless something stops it - and right now every action in the world is accelerating it. It isn't a car rolling down a hill that eventually reaches the bottom and slows down. It is a plane in a steep dive, and if you don't pull up, you crash. Inflation will slow when interest rates exceed inflation (see the 1980s) or we get a depression or recession (see the '30s, 70's or 2007). We could get all three.

Below is the current inflation estimate. War and high energy prices are likely to make future inflation worse, not better. If you do the math with these numbers, any car bought in 2024 will cost about 25% more than the price estimated for 2020. When Tesla priced CT in '19, it was pre-Covid, pre-energy price spike and pre-Ukraine, and nobody imagined the resulting inflation rate.

So not only will your CT cost 25% more, but the interest rate on the loan could be 10%. Those of us who lived through the 80s know that isn't crazy talk. And if you're cashing in your investments to buy, stocks and bonds will likely be down too.

When Elon musk says we need more domestic fossil fuels now, you know things are serious.

 

[rr6013]

I do a lot of estimating. Some of it for car manufacturers. The last two years have seen at least 20% increase in cost period. Across the board on all projects. The CT will increase in cost. Also the gas and oil craziness is only going to create more EV demand.

I saw a Rivian today and if people are willing to pay $70k plus for that truck the CT can easily get more.

Tesla costs may vary with GigaFactory, 4680, IDRA and vertical integration that Cybertruck could substantially be buffered from the initial wave of inflation. But there’s more…

Agreed OEM are getting a Covid/Russia wammy 1:2 punch. BUT income remains fixed on the consumer buy side. Yet $7/gal. gasoline can’t be sustainable either.

Tesla $25k BEV is needed yesterday. Smart money builds during a recession for new reality. That reality has landed.

Russia situation takes X years. AND China piggybacks its grievances in So. China Sea, Taiwan and Japan islands, an EV economy is put into survival mode.

The $70k—180k BEV’s are luxury class; no longer essential. Survival is subsistence level. These GigaFactories are powerful tools in the right hands.

Israel entered the Russia conflict yesterday. Putin asserted Syrian forces will deploy to Ukraine. And USA are already backfilling Poland loss of warbirds supplied to Ukraine. SO the next shoe to drop is putting the economy on a war footing. SpaceX are re-engineering Starlink against cyber attack. Tesla can’t be thinking its factories are going to sell luxury goods going forward.

Me thinks we revisit Cybertruck after the war.

 

[Jhodgesatmb]

No, I don't think he did. He mentioned upward adjustments twice.

He said sizeable adjustment in the first paragraph and then said the adjustment could be relatively minor in the second paragraph.

I would ask relative to what, but to me, it doesn't matter. If I believe they were smart enough to hedge their gamble on releasing the CT price years before the factory was built, then I don't believe a price increase is warranted. I don't believe they threw those prices out there without significant thought and cushion.

Nor do I. I expect them to honor the prices they quoted. That said, if they were in some kind of bind I would expect them to only raise prices to cover their [actual] increase in costs, and maybe even cut their profit margins to minimize the impact. That said, I still expect that Tesla will fool around with the design and manufacturing until they can produce the truck at the price they quoted.

 

[Jhodgesatmb]

I was not talking about the "cost" or complexity......my issue is the timing of one of the biggest pieces of equipment that the CT requires in manufacturing....there has been nothing said about it for many weeks.....without it, there will be a very long process to produce production CTs.......your comment "what makes the giga press the long pole of the tent? I would say that the gigapress is the most predictable feature of the truck. They just need to get them delivered, installed, and tested." with that, I think you answered your own question...... that was my point and I thought I made it clear.....I said nothing about cost or complexity.....

can you tell us when the giga press is coming?.....once we see that date, we can maybe figure out how long it will take to install, test, certify and get up to production levels......all HW4, cameras and sensors are an issue and can be solved......supply chain will work itself out and probable before receipt of the giga press.......but I dont think production and certification will take place without the certification of the giga press which we have no information.....I am still betting on late 2023 early 2024 for production

I do not know when the gigapress(es) will be delivered. For all I know (or anyone) they may have one already. They only thing we know is that for every 6K-ton gigapress they have received at giga austin to date, it has taken them about 2 months to get it to a point where they are casting parts. I do not know how long it would take with a brand new casting machine and brand new dies but it would likely be in the ballpark. Say 3 months. Total guess of course. These things are massive, so they are probably not being shipped with other things, so I wonder whether the supply chain logistics issues would be a big factor. After all, they would already have to set up shipping months ahead of time. Anyway, all I was/am saying is that they can be producing gigacastings for the CT this year, easily, and that, to me, makes those machines not a big tent pole issue. To me a big issue is something like the wiper because they don't even have a design yet. With the gigapresses, they have a supplier that knows what they are doing, experience with these machines, tried and true materials and processes, etc. It is just a matter of time. Of course, you are welcome to make whatever plans you want, and you may be right. I surely don't know.

 

[Crissa]

I do a lot of estimating. Some of it for car manufacturers. The last two years have seen at least 20% increase in cost period. Across the board on all projects. The CT will increase in cost. Also the gas and oil craziness is only going to create more EV demand.

I saw a Rivian today and if people are willing to pay $70k plus for that truck the CT can easily get more.

Tesla increased prices only by 10%. They also increased the profit they make on each car the same amount.

...So... Seems like Tesla is just straight up pocketing what others are having to pay in extra costs.

-Crissa

 

[MEDICALJMP]

Tesla can increase their prices 15, 20, 25 per cent; whatever they feel justified due to inflation and cost overruns, feature creep and miscalculations. If they do that they may end up pricing themselves out of some significant sales. Not all of us have tons of disposable cash we can throw at rising prices. A good many of us who reserved our trucks did so at the projected price and adjusted our savings rate and lifestyles to afford $X. I know what my budget can afford. If it goes past that limit when they do (finally) start producing the Cybertruck I will end up driving my Avalon for another 10 years and pocketing the savings of not buying a vehicle I don't really need, but really, REALLY want.

 

[anionic1]

Tesla costs may vary with GigaFactory, 4680, IDRA and vertical integration that Cybertruck could substantially be buffered from the initial wave of inflation. But there’s more…

Agreed OEM are getting a Covid/Russia wammy 1:2 punch. BUT income remains fixed on the consumer buy side. Yet $7/gal. gasoline can’t be sustainable either.

Tesla $25k BEV is needed yesterday. Smart money builds during a recession for new reality. That reality has landed.

Russia situation takes X years. AND China piggybacks its grievances in So. China Sea, Taiwan and Japan islands, an EV economy is put into survival mode.

The $70k—180k BEV’s are luxury class; no longer essential. Survival is subsistence level. These GigaFactories are powerful tools in the right hands.

Israel entered the Russia conflict yesterday. Putin asserted Syrian forces will deploy to Ukraine. And USA are already backfilling Poland loss of warbirds supplied to Ukraine. SO the next shoe to drop is putting the economy on a war footing. SpaceX are re-engineering Starlink against cyber attack. Tesla can’t be thinking its factories are going to sell luxury goods going forward.

Me thinks we revisit Cybertruck after the war.

Thats very likely what will happen. The 2009 recession didn't really see the market level out for about 5 years. Then we were smooth sailing again. I think the CT needs realistic market levels for cost to be considered affordable even if that is an $80k truck. We all now Rivian is losing their shorts on every truck they make right now with all that upfront cost and slow production. Tesla will have the huge advantage of their production expertise and economies of scale. But i think its aging and wiser Elon not willing to take as many risks for sure.

The interesting thing about war is that usually it triggers more government spending and in turn more money in circulation. Usually crazy life events like the collapse of the housing securities or a pandemic would seem to tank an economy but with the us governments overwhelming acceptance of Keynesian economics and dumping money into the economy in trying times, we have seen the opposite and even during a pandemic we managed to hit extreme inflation. Partly due to shortages for sure, but also due to trillions being dumped on the economy. And those trillions led many to stop working and drive shortages up even more.

So now we go silently to war with intense inflation already and a very much struggling economy. All I can say is its going to be a really bumpy next 5 years especially for lower income and younger demographics trying to afford to live and have any vehicle to drive.

At some point I hope we the people can find a way to take charge of our own value system and separate from governments control and craziness. So we aren't on a financial rollercoaster but rather on RV road trip where we drive. I don't think Crypto is the answer but we need to come up with something. The value from the goods and services we provide eachother is molested at the hands of dumb government decisions and we deserve better. We deserve more stability and I hope one day we can take that back, because clearly its not as safe in their hands as it would seem. Anyway, I know that's way off topic and too political for this space but since the CT is years away we may need to expand here.

 

[Crissa]

...And those trillions led many to stop working and drive shortages up even more.
...

I love your realism!

...but this part is out of sequence: Businesses laid people off before any recovery money had been passed in Congress. So they lost their jobs before the trillions got into the economy. And for the most part, they've returned to work

https://jabberwocking.com/employment-in-the-united-states-is-pretty-strong/

We're along the trend line, so basically recovered. And the up-adjusted jobs reports (not just the initial numbers, but the real numbers were even better) of the last two months aren't in this chart.

Of course, the gas prices are going to be a massive headwinds to the economy... Except for EVs.

-Crissa

 

[happy intruder]

I do not know when the gigapress(es) will be delivered. For all I know (or anyone) they may have one already. They only thing we know is that for every 6K-ton gigapress they have received at giga austin to date, it has taken them about 2 months to get it to a point where they are casting parts. I do not know how long it would take with a brand new casting machine and brand new dies but it would likely be in the ballpark. Say 3 months. Total guess of course. These things are massive, so they are probably not being shipped with other things, so I wonder whether the supply chain logistics issues would be a big factor. After all, they would already have to set up shipping months ahead of time. Anyway, all I was/am saying is that they can be producing gigacastings for the CT this year, easily, and that, to me, makes those machines not a big tent pole issue. To me a big issue is something like the wiper because they don't even have a design yet. With the gigapresses, they have a supplier that knows what they are doing, experience with these machines, tried and true materials and processes, etc. It is just a matter of time. Of course, you are welcome to make whatever plans you want, and you may be right. I surely don't know.

agreed....I dont think any of us know......yes they are big and un-tried, but still not here and there is a Loy of ancillary pieces of equipment that go with it.....we'll see.......I got a count-down clock going with the date of 12 Jan 2023 before beta testing is completed

 

[Ogre]

agreed....I dont think any of us know......yes they are big and un-tried, but still not here and there is a Loy of ancillary pieces of equipment that go with it.....we'll see.......I got a count-down clock going with the date of 12 Jan 2023 before beta testing is completed

Unless things change seriously and Tesla gets super sneaky we’ll know at least a couple months in advance. No point getting worked up until we start seeing Cybertruck castings and the Gigapress installed.

 

[go99s]

My abiding thoughts when I first saw the Cybertruck was that its exo-skeleton design was absolute genius - frame and body in one simple piece, no paint - and would decimate the costs associated with manufacturing a 'Full-size Truck'! - If I recall correctly, Sandy Munro's conclusions stated the same. No one here seems to be considering the massive savings associated with this 'low-poly' design relative to conventional car or truck manufacture. Whilst I think that the front and rear castings plus 4680 savings were already baked in at launch, rear wheel steer and other enhancements probably weren't. I'm sure that EM has factored in some padding and that launch pricing will likely be honored.
I believe that the main reason why current S3XY prices have gone up is mostly to reduce the demand as Tesla simply cannot deliver! EM took our pre-order deposit to gauge demand and once it became insatiable, he had to remove any further CT pre-orders by removing it from the website. Thus, I consider that we will not have a significant price hike.

 

[Ogre]

My abiding thoughts when I first saw the Cybertruck was that its exo-skeleton design was absolute genius - frame and body in one simple piece, no paint - and would decimate the costs associated with manufacturing a 'Full-size Truck'! - If I recall correctly, Sandy Munro's conclusions stated the same. No one here seems to be considering the massive savings associated with this 'low-poly' design relative to conventional car or truck manufacture.

I wouldn’t say “Nobody”, but it seems to be largely ignored.

A big chunk of the design work on this truck was done right after or even during “Production Hell” from the Model 3. They took all of the frustration and problems they encountered on the Model 3 and designed a vehicle with ease of manufacturing as a primary goal.

If it’s *not* massively less expensive to manufacture than the F-150 Lightning or the Rivian, then Tesla screwed up.

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