Selling the Tesla Cybertruck will hurt

Tesla confirmed that Cybertruck sales will hurt the release of quarterly results. Sales of the controversial electric pickup truck have stalled for a year on the production ramp.

Considering Tesla started production over a year ago, it’s still early in the Cybertruck program. Some say it’s too early to tell if it will succeed, but there is room to worry that it won’t and it won’t.

Tesla claims that there are more than 1 million reservations for the truck, but we always doubt their commitment to purchase because Tesla lowered the reservation deposit to only $ 100 for the new program.

In addition, the production version of the truck will be more expensive and will have a smaller size than the one initially announced by Tesla.

Those issues are compounded Tesla delivered an estimated ~40,000 Cybertrucks before opening orders beyond the reservation program.

Tesla sales are difficult to track because the automaker is the most opaque when it comes to breaking down sales by model. Tesla bundles sales of the Model 3 and Model Y and all other vehicles (Model S, Model X, Cybertruck, and Tesla Semi) into the “other models” category.

now, Tesla releases Q4 delivery numbers and confirmed that it delivered 23,640 units of its “other models.”

Based on how Model S and Model X sales are tracking, We estimate that Tesla delivered between 9,000 and 12,000 Cybertrucks in Q4which is likely to be lower than in Q3 despite the launch of cheaper non-Foundation Series models and the opening of orders beyond those with reservations.

It is also clear that this is not a production issue. Tesla added discounts and incentives to buy the Cybertruck this quarter. While inventories of other models were depleted at the end of Q4, Cybertrucks are still available and can be found on Tesla lots.

There is some hope for Tesla. We just reported that the Cybertruck officially qualifies for a $7,500 US tax credit today, which should help the request.

However, the incoming Trump administration, which is supported by Tesla CEO Elon Musk, has said that they intend to remove it as soon as possible. Therefore, Cybertruck will probably only have access for a few months. This should help boost sales temporarily and until Tesla brings out a motorized and cheaper version of the truck.

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We’ve been following the Cybertruck program closely, and we’ve reported many instances of demand issues, but I don’t know that it’s that bad.

There’s a real chance that Cybertrucks deliveries will be flat or even down quarter-to-quarter despite Tesla’s launch of a cheaper version. That’s wild.

Inventories and incentives also make it clear that this is not a production ramp problem but a demand problem.

The tax credit will help, temporarily, and the single version of the motor will also contribute to the volumes later this year, but I think it’s starting to be clear that Tesla will have difficulty ramping up the program to 250,000 units like planned, and Elon’s goal of 500,000 pie-in-the-sky units is ambitious.

As I have said for over a year now, the Cybertruck program was a mistake on Elon’s part. This is what makes Tesla’s growth stop. Tesla should have focused on cheaper cars as originally planned.