Four years after the presentation of his first electric pickup model, Elon Musk is handing over ten futuristic stainless steel cars to their buyers. He is a long way from volume production of his Cybertruck. ntv.de talks to car expert Ferdinand Dudenhöffer from the Bochum CAR Center Automotive Research about the opportunities for electric trucks on the US market, about the costs and what drives Elon Musk.
ntv.de: Tesla is undisputedly the great electric car pioneer. But its lead in the market has shrunk as competition has increased. Can the Cybertruck bring Tesla forward again?
Ferdinand Dudenhöffer: Musk’s idea was to dominate the American electric car market with the Cybertruck. Pickups are the ultimate in America. They are sold in large quantities. At the same time, he focused on electromobility in the USA. Now, however, problems are emerging here. E-mobility in the USA is not going quite as well as he thought. In contrast to combustion pickups, electric pickups do not sell well in America. The buyers are generally older and conservative drivers who are not quick to switch to electric mobility.
E-mobility could also become less important if Joe Biden is not re-elected and Trump becomes President of the USA. Trump is an oil man, and Americans would follow him because combustion engines are cheaper. This is a political risk that Musk could not have foreseen years ago when the idea for the Cybertruck was born. Therefore, Elon Musk now has both market and political risk.
Musk has even more problems. There’s the price: A mid-range model costs $61,000 – before taxes, rebates and subsidies. The budget was $40,000. Who can afford that?
Musk set the price high because he is initially selling few cars. These are unique pieces. If supply is tight, you can also ask for a higher price. Musk has his fans, so it wasn’t clumsy of him to price it so high. I think if he really gets the production process right, the price will be around $50,000. Then the Cybertruck will take off.
How can this vehicle with its special features be cheap and economical?
That depends on the production process. For the Model 3, Musk works with a huge aluminum die-casting machine, which gives him great cost advantages for large volumes. We haven’t seen anything like this with the Cybertruck yet. But Elon Musk wouldn’t be Elon Musk if he didn’t have a concept in his drawer that he wanted to implement in order to go into larger series. He needs a production technology that is significantly cheaper. Today there are individual cars welded together that are far from cost-effective. But that is exactly what is necessary in the market.
The long start-up phase would be the next problem. The majority of prospective buyers still have to wait for their Cybertruck. Only about ten trucks were handed over on Thursday. It will take until 2025 before Musk can produce the so-called light truck at a rate of 250,000 per year. What does this delay mean?
It’s not a problem that the Cybertruck comes later. Delays have never hurt Elon Musk. Customers know that appointments with Elon Musk are as soft as wax. This means that he has financing costs that were not planned for in his investment plan for the Cybertruck. But that won’t upset Tesla. He can absorb this pre-financing or additional losses that he may incur. The bigger problem for him could be getting the production process right so that he can build 250,000 Cybertrucks per year. And cost-effectively. That is the really big open question.
Musk himself has set a price target that should be affordable for many people. Is that realistic, given the material alone?
I don’t think anyone can answer this question today because no one knows his planned production process. What Musk is doing today looks like one-off production. Ten cars delivered, that’s niche production. This is Ferrari, but not Tesla. The product problems with the stainless steel body, that the price is far away from what we originally thought and that we only produce one-off items, that’s all a burden. But overall we know too little about its cost and production structure. This is a huge uncertainty. The product is completely different than he imagined. Can he handle it? Something can go wrong. On the other hand, you can’t rule out the possibility that it will work.
You first have to understand the product. A material that is ultra-hard and does not require painting, resistant to dents. That sounds reasonable. But bulletproof? That seems a bit absurd. Why do you need a car like that?
When it comes to Elon Musk, you have to know that he doesn’t follow others, but wants to set his own trends. And he can only set his own trends if he has his own pickup. This is not a standard pickup truck. The standard pickup is something like the Ford Series 150. Replicating something like that isn’t Elon Musk’s thing. His thing is to do something that triggers aha effects. That’s exactly what this new or unusual design, which is more of an anti-design, is supposed to trigger. Bullet safety is hot. In America, a 16-year-old can buy a machine gun. The attitude towards weapons is different than ours. I think Musk addressed the topic well. Nobody else has bulletproof protection. He can use this to build a myth.
Musk is convinced that his Cybertruck will change the streetscape of the future. Can you imagine that?
If he can implement his plans and the Cybertruck is available for, say, $50,000, I can imagine him setting a trend with this anti-design he’s created. Americans are quick to jump on trends, which could make the Cybertruck successful. However, it is difficult to estimate how big this opportunity is. But please don’t rule it out. Elon Musk has always been good for surprises. He fights like a lion. And he works like a madman on these things. And it has been shown again and again that he implemented things that no one believed in.
Will we see the Cybertruck on other global markets in the future?
Selling the truck in Europe is nonsense, and in my opinion also in China. Musk needs to play the issue in North America, in the US and Canada. I don’t want to rule out the possibility that he will succeed. But he is facing big problems, that has to be made very clear. He has to get series production done and the promotion of electromobility in America must not stop, then he has a good chance of making the Cybertruck successful.
Diana Dittmer spoke to Ferdinand Dudenhöffer