Market Expectations Since 2019 Release
Angular Body...Mass Production Setbacks
Since its unveiling in 2019, the electric pickup truck Cybertruck, hailed as Tesla's hope and highly anticipated by the market, has become a headache for Tesla due to repeated production plan delays and mass production setbacks.
On the 18th (local time), Tesla released its third and fourth quarter results, which fell short of expectations. The company was also tight-lipped about the Cybertruck, which investors had been eagerly awaiting, triggering a sell-off.
Elon Musk, Tesla CEO, stated at the earnings announcement that "there are quite a few challenges to overcome to reach mass production" of the Cybertruck.
He added, "It is common to face difficulties in mass production when applying new technologies or producing new car models. Especially in cases like the Cybertruck, which has a design significantly different from existing ones and employs advanced technology, the challenges are even greater."
The Financial Times (FT) reported on the 21st that the Cybertruck's angular exterior, instead of a streamlined body, could be a cause of the mass production setbacks.
Jim Farley, CEO of Ford, which dominates the North American pickup truck market, told FT that while the Cybertruck's angular body has the advantage of reducing production costs, it is very disadvantageous for mass production.
The Cybertruck is Tesla's new model released three years after the Model Y. It is expected to be a new breakthrough for Tesla, which has been experiencing profit declines due to intensified competition and price cuts.
Pickup trucks are the highest-margin market in North America. The Detroit Big Three?General Motors (GM), Ford, and Stellantis?dominate this market. When the Cybertruck, expected to ship for the first time at the end of next month, hits the market, it will have to compete directly with these Big Three.
Musk revealed his ambition when unveiling the Cybertruck just before the pandemic in 2019, saying, "We want to do something different." Production began in 2021, two years later, with pre-orders accepted. However, production plans have continued to be delayed since then.
Quality reviews have generally been positive. Philippe Houchois, an automotive analyst at investment bank Jefferies who participated in test drives, said, "It was a really impressive beast," adding, "Thanks to the all-wheel drive, smooth high-speed lane changes were possible. It was very comfortable and handled well."
Despite production setbacks, expectations remain that the Cybertruck will become Tesla's new breakthrough once it overcomes these challenges. Although the Cybertruck must face the absolute giants of the pickup truck market immediately upon release, there are also forecasts that it will create a new market unique to itself.
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