In 2019, Tesla announced plans to introduce the innovative stainless steel CyberTruck, which at the time would have been the first electric pickup truck on the market. Fast forward four years later after numerous manufacturing setbacks, the car made its long-awaited arrival on the roads in November 2023. However, as the dust settles and excitement surrounding the innovative product fades, the final verdict on the success or failure of the vehicle remains to be seen.
The truck is outfitted with all the bells and whistles: electronically adaptable air suspension, shatter-resistant armored glass, an ultra-hard exoskeleton extremely resistant to damage, a 2,500 pound payload holding ability, and a whopping 11,000 pound towing capacity [1]. The truck even has a “frunk,” adding an additional trunk in the front of the vehicle to complement the storage capacity of the truck bed. These features are designed to captivate truck enthusiasts who value sophisticated and cutting-edge technology. Its robust build ensures high resistance to damage, which is appealing to those who prioritize durability in a vehicle. Additionally, the Cybertruck’s unique dimensions contribute to a spacious interior and bed without compromising its ability to fit in a standard 20-foot garage. Despite these impressive features, the truck’s most notable detail is its futuristic and trapezoidal appearance which seems to have been lifted straight from the setting of a dystopian film. The truck certainly stands out among Hondas and Kias currently on the road, and the question is: why has Tesla deviated so far from current designs in its boxy appearance?
The manufacturing process was not a smooth ride for Tesla, encountering its fair share of bumps along the road. Elon Musk himself came out and said “there will be enormous challenges in reaching volume production with the Cybertruck and in making the Cybertruck cash-flow positive [2]." The difficulty of the stainless steel material to work with is the main contributor to the production challenges, and Tesla doesn't see themselves mass producing the vehicle until 2025 or later. While appealing because of its durability in its final product state, the stainless steel is difficult to mold just right. The demand for the CyberTruck is simply above current production capabilities. To accomplish such a manufacturing feat, Tesla had to invent a new technique known as “Air Bending,” which allows for the precise shaping of their stainless steel without direct contact with the material [3]. Such a technique was required due to the impressionability of the material and the need for accuracy which it requires as even small imperfections are easily visible in the stainless steel.
Yet another production challenge lies in battery production. Tesla’s technique of dry-coating the electrodes of their 4680 batteries is a timely endeavor, restricting their production capacity far below their initial projections [4]. Ultimately, these production challenges slowed down Tesla’s timeline and allowed for other electric trucks to come out to play. Namely, the Ford F-150 Lightning and GMC Sierra EV, which increased competition and allowed time for consumers to lean towards hybrid car preferences. Although the production of the CyberTruck has been slow and fraught with complexities, it stands as a testament to Elon Musk's innovative spirit and represents a significant and impressive achievement in manufacturing.
The performance and perception of the Cybertruck, however, is not as shiny as its appearance. Owners of the vehicle have voiced concerns about their trucks rusting after being driven in the rain. The Cybertruck lead engineer responded to some of these claims with hesitancy, but urged that the rust marks are “surface contamination only and can be cleaned off easily [5]." Tesla offers a paint film option for around $5,000 to protect the car's exterior, but what is the purpose of the stainless steel exterior if customers have to pay even more money to protect the material or cover blemishes [6]? Drivers are frustrated with the maintenance required of them to avoid rust spots and are calling into question whether the Cybertruck was truly ready for the market. Concerns for the safety of others on the road have also been voiced. Although the robust and solid construction is designed to withstand external damage, it doesn't address the potential harm the vehicle could inflict on others in the event of a collision. No driver wants a 7,000 pound stainless steel truck with boxy edges crashing into them on the highway.
Demand for the vehicle has not been in shortage, however. The truck supposedly received over one million pre-orders and currently has a waitlist of nearly a year. Tesla has yet to confirm these exact numbers, but it is known that the Cybertruck factory in Texas has an annual production capacity of 125,000 vehicles and that Tesla has hopes to expand upon these numbers. Of course, an expansion won’t be feasible until at least 2025 [8]. In response to this demand, Tesla pondered increasing the Cybertruck price but decided this was not fair to their brand or consumers. When coupled with the slow production capacity, it is easy to see how Tesla will hold on to its stream of demand as Cybertrucks are slowly rolled out into the hands of consumers. It is challenging to decipher if this demand is driven by Tesla enthusiasts and the widespread excitement associated with Elon Musk and his brand, or if the radical design and features are drawing in new consumers.
This high demand speaks to the more positive features and consumer reactions to the Cybertruck. Drivers have noted the car's tactile steering and impressive maneuverability. The Cybertruck's superior handling facilitates easier navigation through tight parking lots compared to other trucks. Consumers enjoy the sleek and modern design of the interior, which mirrors its exterior. It is also of note that the reports of exterior rusting while concerning, are not widespread among consumers.
Despite some manufacturing and performance hiccups, it speaks to the success of the model that Tesla is more production-constrained than demand-constrained at the moment. Additionally, according to Boston University Questrom School of Business professor, Tim Simcoe, the mere price of the truck means that fulfilling just 15% of preorders could equate in numbers to Toyota’s annual US Truck Sales [7]. Tesla’s success will hinge on retaining a sufficient flow of demanding customers for the CyberTruck as well as amping up production in the future. While Tesla has a grasp on the electric vehicle market, it is of note that the target demographic of truck drivers typically take to electric vehicles more slowly than other types of drivers. Additionally, the truck market has less global potential than other models of vehicles [8].
Tesla has always stood on the edge of innovation and continues to with their CyberTruck. An impressive manufacturing feat, the Cybertruck is the vision of the future and an example of an environmentally friendly electric vehicle that the world needs. However, are the production and market challenges worth the radical design and scrutiny being placed on Tesla?
All content is the intellectual property of the Virginia Undergraduate Business Review.
REFERENCES
[1] “CYBERTRUCK.” Tesla, https://www.tesla.com/cybertruck . Accessed 12 April 2024.
[2] Smet, A. (2023, December 13). Tesla's innovative air bending: shaping the future of stainless steel manufacturing. Medium. Retrieved April 16, 2024, from https://medium.com/the-tesla-digest/teslas-innovative-air-bending-shaping-the-future-of-stainless-steel-manufacturing-8a3dc5d680af
[3] Blackstock, E. (2023, December 26). Tesla's Cybertruck is hitting unexpected battery production delays. Jalopnik. Retrieved April 16, 2024, from https://jalopnik.com/teslas-cybertruck-is-hitting-unexpected-battery-product-1851124056
[4] Gilboy, J. (2024, February 22). Tesla claims Cybertruck 'rust' spots that people keep panicking about are normal. The Drive. Retrieved April 16, 2024, from https://www.thedrive.com/news/tesla-claims-cybertruck-rust-spots-that-people-keep-panicking-about-are-normal
[5] Cerullo, M. (2024, February 29). Tesla Cybertruck owners complain their new vehicles are rusting. CBS News. Retrieved April 16, 2024, from https://www.cbsnews.com/news/tesla-cybertruck-rusting-complaints-from-owners/
[6] Reid, C. (2023, December 1). The Cybertruck must be huge—or it will dig Tesla's grave. WIRED. Retrieved April 16, 2024, from https://www.wired.com/story/tesla-cybertruck-success-failure/
[7] Misoyannis, A. (2024, January 25). Tesla Cybertruck wait times shorter than expected, almost sold out for 2024. Drive.com.au. Retrieved April 16, 2024, from https://www.drive.com.au/news/tesla-cybertruck-almost-sold-out-for-2024/
[8] Munoz, J. F., & Smith, C. (2023, December 8). The Tesla Cybertruck has strong sales potential, but only If US buyers step up. Motor1.com. Retrieved April 16, 2024, from https://www.motor1.com/news/699884/tesla-cybertruck-potential-us-motor1-numbers/
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