Price for CyberTruck ESTIMATE released by Farzad Mesbahi July 3rd, 2023

[Ogre]

So?

You think Tesla won't price match their competitions as well as consider their own internal production ramp? They know the market and how much consumers can handle.

I reckon Tesla will not have incentives to lower CT prices to numbers shown in 2019, initially. They will up the price so that supply matches demand.

Tesla has already showed us price comparisons between the Cybertruck and the competition. It is literally what launch night pricing was based on.

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[jerhenderson]

So?

You think Tesla won't price match their competitions as well as consider their own internal production ramp? They know the market and how much consumers can handle.

I reckon Tesla will not have incentives to lower CT prices to numbers shown in 2019, initially. They will up the price so that supply matches demand.

tesla wants to take market share from ICE..... they will set their price to make sure every CT built is a CT sold.

 

[Cenakaze]

tesla wants to take market share from ICE..... they will set their price to make sure every CT built is a CT sold.

They can take market share when they actually have the capacity to do so. In the mean time, CT will be priced right. Right at the top of predicted consumer price ceiling.

They've done pricing based on supply&demand with model Y, they've done it with model S, they'll do it with CT

 

[Crissa]

They can take market share when they actually have the capacity to do so. In the mean time, CT will be priced right. Right at the top of predicted consumer price ceiling.

They've done pricing based on supply&demand with model Y, they've done it with model S, they'll do it with CT

Your paragraph B contradicts your paragraph A.

Tesla has never spiked the pricing of vehicles that people have already put down reservations or preorders for.

Do we really need so many pricing threads?

-Crissa

 

[kbolt]

This sounds good to me. I’m assuming he’s referring to the dual-motor AWD. I think the “performance” model (tri-motor AWD) will be between $90K-$100K. Just my guess and opinion, fanboys.

They announced the price of the TRI at $69,900... Does it make sense for the Tri to cost 20k more when the model Y costs 15k less than it did during reveal?

 

[CYBRSMTH]

They announced the price of the TRI at $69,900... Does it make sense for the Tri to cost 20k more when the model Y costs 15k less than it did during reveal?

Yes, it does make sense for a variety of reasons. One, the $69,900 price point is from 4 years ago. Two, at a shareholder meeting in May 2023, Elon said the CyberTruck was hard to make and won’t be affordable. Three, the Model Y is based on the Model 3, shares many parts with it, and came out ahead of schedule. Four, the CyberTruck is not based on a preexisting vehicle and doesn’t share parts with anything. In fact, new expensive processes had to be created just to produce it. It will take time for things to scale and costs to come down. Probably years. Five, the 4680 structural battery pack was expected to be more advanced than it actually is, which means in order for the CyberTruck to go 500 miles it’s going to need a giant battery pack. This will add to the expense.

I’ve said it before and I’ll say it again. I want to be wrong, but I don’t think I am. There will be a more affordable Dual-motor model in the $70K-$80K range down the line. Also, why not speculate high and be pleasantly surprised if it’s lower, rather than speculate low and ultimately be disappointed?

 

[Greshnab]

Yes, it does make sense for a variety of reasons. One, the $69,900 price point is from 4 years ago. Two, at a shareholder meeting in May 2023, Elon said the CyberTruck was hard to make and won’t be affordable.

can you find a quote on him saying it won't be affordable please... I believe the words used were making it affordable is HARD.. not that it wouldn't be done.

 

[jerhenderson]

Yes, it does make sense for a variety of reasons. One, the $69,900 price point is from 4 years ago. Two, at a shareholder meeting in May 2023, Elon said the CyberTruck was hard to make and won’t be affordable. Three, the Model Y is based on the Model 3, shares many parts with it, and came out ahead of schedule. Four, the CyberTruck is not based on a preexisting vehicle and doesn’t share parts with anything. In fact, new expensive processes had to be created just to produce it. It will take time for things to scale and costs to come down. Probably years. Five, the 4680 structural battery pack was expected to be more advanced than it actually is, which means in order for the CyberTruck to go 500 miles it’s going to need a giant battery pack. This will add to the expense.

I’ve said it before and I’ll say it again. I want to be wrong, but I don’t think I am. There will be a more affordable Dual-motor model in the $70K-$80K range down the line. Also, why not speculate high and be pleasantly surprised if it’s lower, rather than speculate low and ultimately be disappointed?

he never... and I mean never... said the CT won't be affordable.

 

[Ogre]

So?

You think Tesla won't price match their competitions as well as consider their own internal production ramp? They know the market and how much consumers can handle.

I reckon Tesla will not have incentives to lower CT prices to numbers shown in 2019, initially. They will up the price so that supply matches demand.

This comment and millions of similar ones didn’t age well.

 

[Ogre]

Now Musk is chiming in poking holes in on Lightning pricing. The whole “Cybertruck will be priced based on obscenely high Lightning pricing” theory is falling apart entirely.




PS: Musk said this AFTER the 17% price drop.

 

[Regenshire]

can you find a quote on him saying it won't be affordable please... I believe the words used were making it affordable is HARD.. not that it wouldn't be done.

You are correct, his statement was making it affordable is hard. This has been interpreted by alot of people as meaning they are going to price it sky high, but Tesla has never stated that.

The quote I believe was from Twitter in March 2022.

Elon Musk - March 2022 - Twitter
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Our primary challenge is affordability. Creating an expensive truck is relatively easy.

If it is extremely hard to do so for Tesla, despite our much greater economies of scale & better technology, then it is damn near impossible for others.

Elon Musk is stating that it is not an easy task to bring this vehicle to production and hit their price targets. He in no way says that Tesla is going to up-price it or that they have given up on their price targets, just that it is a challenge. He is also stating that making an expensive truck is easy.

Also, it should be noted that Elon Musk talked a lot about Affordability during the Q1 financials. They are obviously very aware that affordability it key to moving vehicles and that the current financial environment of having high interest rates means the customers can afford less right now.

Elon Musk - Q1 2023 Financials - On Higher Volumes vs Higher Margins and Cybertruck Status Update
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We've taken a view that pushing for higher volumes and a larger fleet is the right choice here versus a lower volume and higher margin. However, we expect our vehicles, over time, will be able to generate significant profit through autonomy. So we do believe we're like laying the groundwork here, and then it's better to ship a large number of cars at a lower margin, and subsequently, harvest that margin in the future as we perfect autonomy. This is an extremely important point.

Let's see. Regarding the Cybertruck, we continue to build Alpha versions of the Cybertruck on our pilot line for testing purposes. It's a great product, and we're completing the installation of the volume production line at Giga Texas, and we're anticipating having delivery event, a great delivery event probably in Q3.

As with all new products, it will follow an S curve, so production starts out slow and then accelerates. So the Cybertruck is no different. So it's -- there's [Indiscernible] amount of demand for the product, obviously. And it is my view, a fantastic product, a hall of famer. But as with all new products, it takes time to get the manufacturing line going. And this is really a very radical product. It's not made in the way that other cars are made.

Elon Musk - Q1 2023 Financials - On Interest Rates & Affordability
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Yeah. I mean there's really two macro factors that are tricky. The biggest being the interest rate. So if there's a very high Fed rate or interest rates are very high, that is -- every time the Fed raise the interest rates that's equivalent to increasing the price of a car. It makes the cars less affordable because people are able to buy cars as a function of what they can afford on a monthly basis. So that's -- so it's just almost directly equivalent to a price increase, is there any kind of interest rate increase.

Then the other factor is whenever there is uncertainty in the economy, people will generally postpone new -- big, new capital purchases like a new car. This is a natural human reaction. So if people are reading about layoffs and whatnot in the press, they're like, well, they might be worried about -- they might be laid off. So then there'll be naturally a little more hesitant than they would otherwise be to buy a new car. Now this is just the nature of the auto industry. But there is -- there will be a trans amount of pent-up demand for new cars. So it goes through cycles.

Elon Musk - Q1 2023 Financials - On Affordability and Interest Rates and Tesla in a Unique Position
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Well, I can't emphasize enough the whole -- just fundamental question of affordability. For most people, their ability to buy a car is a function of can they make monthly payment or not. And so like I said, if interest rates are really high, like they are right now, then in some cases, people can't get a loan at all.

So it's -- I think probably banks are pretty -- not leaning forward in providing loans, I expect, these days. So that's -- like there is -- there is quite a powerful story here when you -- going back to something as alluded to a moment ago -- I mentioned a moment ago that Tesla is in a uniquely strong strategic position. Because we're the only ones making cars that technically, we could sell for zero profit for now and then yield actually tremendous economics in the future through autonomy, no one else can do that. I'm not sure how many people will appreciate the profundity of what I've just said, but it is extremely significant.

Elon Musk - Q1 2023 Financials - On Pricing vs Competitors
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Well, I mean, we're not trying to say, take pricing actions in order to be deliberately -- to deliberately undermine competitors or anything like that. We really don't think about competitors that much. We just look at, do people like our cars, how can we make the product better, can they afford our cars? And the sort of the things like improving service and whatnot.

But actually, we do have this unique strategic advantage that we have -- we're making a car that if autonomy pans out and we think it will, where that asset is actually will be worth a hell a lot more in the future than it is now. So, it is taking to be possible to sell it at zero profit, but still have the net present value of future cash flows associated with that asset very significant.

 

[Cenakaze]

Now Musk is chiming in poking holes in on Lightning pricing. The whole “Cybertruck will be priced based on obscenely high Lightning pricing” theory is falling apart entirely.




PS: Musk said this AFTER the 17% price drop.

Guess what? That doesn't contrast my point at all, as now the competitive pricing has dropped to 70k for 300ish mi truck. My point is that Tesla will price it right at the point where people will buy up the production rate.

What determines buyers' interest? Availability, relatively pricing and features. F150 extend range dropping to 70k is exactly an example of change in relative pricing. If Tesla believes sales will be impacted, they will then lower the price, not just set a very low price in the beginning where not even their production rate can satisfy demand.

All that is to say the very aggressive estimated prices in 2019 are unlikely to materialize in the short term, unless the market suddenly grow intense and 300mi trucks start popping up at 50k

 

[Ogre]

Guess what? That doesn't contrast my point at all, as now the competitive pricing has dropped to 70k for 300ish mi truck. My point is that Tesla will price it right at the point where people will buy up the production rate.

What determines buyers' interest? Availability, relatively pricing and features. F150 extend range dropping to 70k is exactly an example of change in relative pricing. If Tesla believes sales will be impacted, they will then lower the price, not just set a very low price in the beginning where not even their production rate can satisfy demand.

All that is to say the very aggressive estimated prices in 2019 are unlikely to materialize in the short term, unless the market suddenly grow intense and 300mi trucks start popping up at 50k

The competitive truck which Musk said is too expensive is $70k.

 

[Cenakaze]

The competitive truck which Musk said is too expensive is $70k.

70k won't induce a market capacity of 300k+ CT annually, but might suffice for initial production ramp of say, 60-80k annually.

 

[CYBRSMTH]

can you find a quote on him saying it won't be affordable please... I believe the words used were making it affordable is HARD.. not that it wouldn't be done.

I’m tired of reposting this. Look up the numerous articles about it or watch the May 2023 shareholders meeting on YouTube, so you can hear the words coming out of Elon’s mouth.

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