Quiver Quantitative - Elon Musk's Tesla (NASDAQ:TSLA) is preparing for the much-anticipated launch of the Cybertruck, a vehicle Musk has hinted could become a production nightmare akin to the Model X, known for its low-volume output and complex design features. Musk's narrative around the Cybertruck echoes his past reflections on the Model X, which he once criticized for being too complex at launch. With the Cybertruck boasting a stainless-steel body capable of withstanding significant damage, high voltage charging capabilities, and reliance on in-house battery cells that have been delayed, the comparisons to the Model X's troubled history are striking.
Musk's philosophy of starting production processes simply and evolving over time was effectively demonstrated with the Model 3 and Model Y. These vehicles marked a departure from the feature-heavy Model X and showcased Tesla's improved manufacturing approach, leading to mainstream success. However, with the Cybertruck, Tesla seems to be reverting to old habits. Musk's recent comments suggest that Tesla is bracing for a challenging period, with the potential for extensive resource investment and a slow ramp-up to the targeted annual production rate, which may not be achieved until 2025.
The Cybertruck's unique design and production requirements present significant challenges. Its stainless-steel exterior, while durable and corrosion-resistant, poses difficulties in manufacturing due to its weight and the precision required in shaping and welding. Musk himself has noted the importance of extreme accuracy in the Cybertruck's parts, a standard that leaked images of prototype models suggest may not yet be met. These manufacturing hurdles risk delaying Tesla's delivery timeline and complicating the vehicle's mass production.
Despite these production concerns, Tesla is forging ahead with ambitious plans for the Cybertruck. Musk has acknowledged the steep learning curve and significant effort required to bring this innovative vehicle to market. As Tesla prepares to begin deliveries, the industry watches closely to see if the Cybertruck can overcome its production complexities or if it will echo the Model X's history as a cautionary tale of innovation outpacing manufacturability.
This article was originally published on Quiver Quantitative