Musk responds to Cybertruck pricing and specs announcement question (8/23/23)

[newwave1331]

As fun as it is to throw darts at the pricing board, we don't know some key features or specs. Armor glass, ramp, outlet/inverter, range/efficiency, what truck FSD features are included in FSD..... midgate

Just a quick look at the competition:

An ICE F-150 XLT 4x4 with inventor and retractable cover and BlueCruise (3yr) is about $72k. That doesn't have rear wheel steering, ventilated seats, a frunk, ambient lighting, rear screen and whatever else is standard in cybertruck. I'm starting to see how we could get to a mid $70k dual motor.

What minimum range would you accept for a $69k (+FSD) dual motor truck?

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[Jhodgesatmb]

Everyone that can afford it

Not the trucks, the specs, in the online manual.

 

[PilotPete]

Just a quick look at the competition:

An ICE F-150 XLT 4x4 with inventor and retractable cover and BlueCruise (3yr) is about $72k. That doesn't have rear wheel steering, ventilated seats, a frunk, ambient lighting, rear screen and whatever else is standard in cybertruck. I'm starting to see how we could get to a mid $70k dual motor.

What minimum range would you accept for a $69k (+FSD) dual motor truck?

In order to use your example, you have to believe that there is some connection between the costs and profit margins of the example and the CT. I don't believe that the way an F150 is built has any connection with how the CT is built. And therefore, the costs to build are completely independent of one another. Tesla doesn't work like Ford in any current way. Their business model, their design process, absolutely everything is different. And in the end, they have very different outcomes.

 

[Setok]

They've never said they dropped any models.

However, with demand being what it is, the single-motor may not be gotten to for years (and orders canceled, like they did to the Y). Maybe even the tri-motor. No way to know until deliveries start and they tell us their plans. (Maybe even later. Took a year to tell everyone the Model Y RWD was canceled. And this last year, they brought it back in China!)

-Crissa

Just as a side note I don’t think the Model Y RWD was ever fully cancelled outside the US. It’s been constantly available in Europe, and still is.

 

[WHIZZARD OF OZ]

Yeah, but can you imagine the RANGE you would get!

'1.21 Gigawatts! Great Scott!' ( Doc Brown )

 

[Crissa]

Just as a side note I don’t think the Model Y RWD was ever fully cancelled outside the US. It’s been constantly available in Europe, and still is.

No, it was, the reservations were canceled. It wasn't available constantly. They only began taking orders for it again last year.

...Which is about when much of Europe was getting the Model Y, but the point point stands.

-Crissa

 

[newwave1331]

In order to use your example, you have to believe that there is some connection between the costs and profit margins of the example and the CT. I don't believe that the way an F150 is built has any connection with how the CT is built. And therefore, the costs to build are completely independent of one another. Tesla doesn't work like Ford in any current way. Their business model, their design process, absolutely everything is different. And in the end, they have very different outcomes.

A customer’s willingness to pay drives price, not costs. If a company’s costs are lower, that is their profit to keep.

 

[Crissa]

A customer’s willingness to pay drives price, not costs. If a company’s costs are lower, that is their profit to keep.

Only if they're willing to take that profit - and lose the customers unable to make that leap. Losing 10% of your customers for a 10% per unit increase in profit is a bad trade.

-Crissa

 

[PilotPete]

A customer’s willingness to pay drives price, not costs. If a company’s costs are lower, that is their profit to keep.

Perfectly true. However, you were basing CT pricing on what an F150 ICE costs, which is irrelevant. And some products are sold at a loss, in order to achieve a different goal for the company. I believe Tesla's goal with each new vehicle is not only to make a profit, but there are differing corporate goals (i.e. market share, replacement of ICE vehicles, etc) that will have a significant effect on the pricing. Ford is building BEVs because they have to (market and regulation) Tesla is building BEVs because they choose to. And that is my point that they are headed to a different corporate destination than any of the legacy automakers.

 

[Jhodgesatmb]

A customer’s willingness to pay drives price, not costs. If a company’s costs are lower, that is their profit to keep.

You are sort of right, if you are describing unbridled greed. Tesla isn’t driven solely by the accumulation of wealth. In fact, the accumulation of wealth for Tesla is a side effect of its mission, which it is a driven by.

 

[kbolt]

As fun as it is to throw darts at the pricing board, we don't know some key features or specs. Armor glass, ramp, outlet/inverter, range/efficiency, what truck FSD features are included in FSD..... midgate

Just a quick look at the competition:

An ICE F-150 XLT 4x4 with inventor and retractable cover and BlueCruise (3yr) is about $72k. That doesn't have rear wheel steering, ventilated seats, a frunk, ambient lighting, rear screen and whatever else is standard in cybertruck. I'm starting to see how we could get to a mid $70k dual motor.

What minimum range would you accept for a $69k (+FSD) dual motor truck?

I wouldn't buy a dual motor at $69k regardless of features. A nearly 40% markup while other Tesla vehicles have been marked down? I don't think so.

 

[Ehninger1212]

Interesting that people keep thinking that the CT price is going to be considerably higher than originally announced but all the other cars Tesla makes are getting cheaper and cheaper... We will have to see when the price actually gets announced.

Mostly has to do with the fact that Elon said the price would go up.

 

[Crissa]

I wouldn't buy a dual motor at $69k regardless of features. A nearly 40% markup while other Tesla vehicles have been marked down? I don't think so.

And I couldn't buy a Tesla at $69k.

-Crissa

 

[newwave1331]

Only if they're willing to take that profit - and lose the customers unable to make that leap. Losing 10% of your customers for a 10% per unit increase in profit is a bad trade.

-Crissa

Help me understand where you get 10% of customers and a 10% per unit profit estimate? In the first year or two, long term?

When demand is far exceeding supply, this does not matter. I'm not saying this will be the price but I'm just showing that Ford thinks customers are willing to pay this for a truck (with far less features), but its an ICE 37gal 700 mile range.

If you factor the cost of ownership, cybertruck will beat the ICE F150 by >$10k in the first couple of years. Tesla will have to consider what customers will demand for range. If range is 300 mile like at unveil, no one would buy it at $69k.

If its range is 350, 400, 500, 600+ miles... at what point is $69k justified?

If its range is 300 miles, would you buy it at $59k?

And some products are sold at a loss, in order to achieve a different goal for the company. I believe Tesla's goal with each new vehicle is not only to make a profit, but there are differing corporate goals (i.e. market share, replacement of ICE vehicles, etc) that will have a significant effect on the pricing.

Antitrust lawsuits are in Tesla's future, I just don't know when. Remember cybertruck is going after the stronghold of OEM's profitability.

If they purposely sold their product at a loss with the intention of driving competition out of business, that would be illegal. Look up predatory pricing. Early ramp is normally considered an exception but the government could try to claim fully ramped costs will never be profitable at the low price point.

You are sort of right, if you are describing unbridled greed. Tesla isn’t driven solely by the accumulation of wealth. In fact, the accumulation of wealth for Tesla is a side effect of its mission, which it is a driven by.

I agree that Tesla is not driven solely by the accumulation of wealth. The company's mission is to accelerate the world's transition to sustainable energy, and it believes that making profits is necessary to achieve this mission. Tesla reinvests a significant portion of its profits back into research and development, and it has also made significant contributions to the development of renewable energy infrastructure.

However, I also believe that Tesla's wealth is a reflection of its success in achieving its mission. Tesla has made electric cars more popular and affordable, and it has helped to create a market for sustainable energy. As a result, Tesla has created value for society, and it is entitled to the profits that it has earned.

I believe that there is a balance to be struck between the need for businesses to make profits and the need for them to serve the public good. Tesla is a good example of a company that is trying to strike this balance. It is a profitable company that is also making a positive impact on the world.

I wouldn't buy a dual motor at $69k regardless of features. A nearly 40% markup while other Tesla vehicles have been marked down? I don't think so.

Ok, maybe you could stick to your Model Y until pricing comes down. They already have you as a on the EV convert list. What if the price was down to $59k in 18-24 months? Is a 20% markup ok? Maybe you are just part of the "10%" Crissa was talking about. Maybe Elon's final internal pricing decision was too low and that's why Zach the CFO left?

And I couldn't buy a Tesla at $69k.

Maybe a model 3 or y is a better fit for your financial situation. Tesla does have other products in their lineup that have huge rebates available.


This was kind of me playing devils avocet. I do see a business case for it in the short run though. Once they get less supply constrained, prices will come down from whatever is stated at the delivery event. If they produce the tri/quad with 500+ miles early on, this will put less pressure on the dual motor variant. 4680 energy density, production rate and costs are the big mysteries.

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