Cybertruck is priced above the market, coming in at 25% above most people’s expectations across all configurations. Compared to the industry leading EV truck, the Ford F-150 Lightning, the Cybertruck is about $10k more expensive for each trim. The company is making the right decision to price it above the market given its undeniable wow factor, and early adopters are willing to pay premiums to be in the first 50k deliveries. On the October earnings call, Tesla said there are over 1M people on the waitlist, with some analysts estimating it’s closer to 2M. I believe that waiting list will decline to sub 500k over the next six months given the reality that this is an expensive vehicle.

Elon knows the impact price has on demand and is signaling to the market to be patient when it comes to deliveries ramping. For next year I expect sales of  35k trucks, stepping up to 125k in 2025 and 250k in 2026.

This means that in 2024, Cybertruck will account for just under 2% of deliveries and 5% in 2025. As a point of reference, the Model S and X combined account for about 4% of sales.

My sense is that by the end of 2025, Cybertruck pricing will come down by 25% or more as production efficiency improves. At that point sales should start to ramp. That means the first big year for Cybertruck will likely be 2026.

I agree with Musk’s message that the Cybertruck is the best vehicle in the market: “More utility than a truck. Faster than a sports car.” The Cybertruck includes features far above those included in cars and trucks on the market today:

Durability: Cybertruck’s steel frame is the new gold standard for durability and rugged performance. Trucks are easily banged up from daily wear and tear, cargo unloading, worksite usage, etc. Going above and beyond, the frame is bulletproof (hopefully that never needs to be tested again).

Versatility: The most applicable of the feats shown at the event was the “Truck Pull” performance, outperforming the previous best-in-class Ford F-350 Diesel with relative ease. While proving to have the legitimate towing power of a truck, the Cyberbeast model beat a base-model Porsche 911 in a drag race (while towing a Porsche 911). Additionally, it has steer-by-wire turning capabilities, an adaptive steering mechanism to maneuver in tight quarters (a common frustration with large trucks).

Accessories: The Cybertruck offers valuable accessories outside of driving. With a 240V output, the Powershare feature is essentially a $10k mobile generator, capable of powering your house during a blackout and charging other Teslas.

Because the Cybertruck was highly anticipated, the significance of the vehicle’s technology has largely been overlooked. This comes at a time when, by our count, four of the six major automakers have in the past two months announced plans to slow their pursuit of EVs. The Cybertruck represents the latest evidence that the distinction between Tesla and its traditional rivals is becoming more clear. Not only is Tesla all-in on EVs, they are all-in on changing how people think about vehicles, including their durability and utility (autonomy, versatility of battery).

The table below outlines the major initiatives of Tesla vs Traditional Auto:

The bottom line is that traditional carmakers have shifted their view and believe it will take 10-20 years for EV adoption to hit its inflection. They have tuned down their investments, appropriately, which has benefitted near-term profitability. On the other hand, Tesla believes the inflection curve will hit in the next five years, and they can use their will-of-force to make this a reality. The output of that will-of-force is the best EVs for the lowest price that will singlehandedly pull forward the adoption curve. If Tesla is right, traditional carmakers are making a mistake by slowing their investment. If traditional carmakers are right, Tesla is making a mistake by over-investing into a future that will take time.

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