Here comes Tesla's Cybertruck...
Breaking down how big it could be.
It’s official.
Tesla’s Cybertruck is set to hit the market on November 30th.
Here are a few things to know about one of the most hotly anticipated product releases of the decade…
First, keep in mind it’s been about four years since we got our first look at the Cybertruck prototype.
That was back in November of 2019.
The fact that it looked so different speaks to the unique design, which ultimately led to entirely new manufacturing techniques.
In other words, Tesla had to work through plenty of headaches.
In the meantime though, orders have piled up.
Elon Musk said this week on Tesla’s quarterly conference call with analysts that demand is “off the charts,” with more than one million reservations.
Given the costs associated with the rollout, Musk estimates it will be a year to 18 months before the Cybertruck can be a significant positive cash flow contributor to Tesla.
But putting profits aside for now, let’s take a closer look at how the sales picture could play out.
Analysts right now estimate Tesla could sell about 75,000 Cybertruck’s next year.
Musk himself anticipates 250,000 vehicles being sold per year, but not before 2025.
Figuring out total revenue ultimately depends on vehicle pricing.
Tesla has steadily been cutting costs of existing vehicles this year and he noted this week he’s concerned about the current interest rate environment and its impact on demand from car buyers.
But we’ve seen with electric pick-ups from Ford, GM and others that keeping prices at what many would consider affordable levels has been a challenge.
Let’s just assume for now pricing based on the average price for a full-size pick-up in North America, which is north of $60,000.
Selling 250,000 Cybertruck’s in 2025 could bring in roughly $15 billion.
Note that earlier this year, Musk had stretched the annual sales band for Cybertruck to around 500,000 vehicles.
If Tesla can get there, you’re talking about annual revenue being closer to $30 billion.