What Happened to the $40,000 Tesla Cybertruck?
Always an iffy proposition, an inexpensive model was pushed off the table by inflation and complicated manufacturing.
Delays are nothing new when it comes to new Tesla vehicle debuts. The company has a history of announcing new models and trim levels that then take years to arrive in customers' driveways.
The electric Cybertruck is the latest to follow this pattern, having missed its 2021 on-sale date by nearly two years. Not only that, but the original $40,000 price for the most affordable version of the vehicle has ballooned to $61,000, with the most expensive edition going for about $100,000.
This isn't the first time Tesla has dangled and then not exactly delivered a low price, either.
What happened over the past two years to tack $20,000 — a 50% increase — onto the Cybertruck's price? It turns out that a lot can change in 24 months, especially in a market as chaotic and competitive as that of electrified pickup trucks.
Inflation Pushed Many Costs Higher Than Predicted
"Probably the most important factors [in the increased Cybertruck price] are inflation and, in turn, higher component costs," said Ed Kim, president and chief analyst at the automotive research and consulting firm AutoPacific. "The pandemic kicked off significant inflation, and that has made the Cybertruck's components significantly more expensive than when the truck was announced in 2019."
Tesla CEO Elon Musk confirmed as much last year when he discussed the impact of inflation on the Cybertruck's production prospects.
Kim pointed specifically to battery costs as problematic for Tesla, as prices haven't dropped nearly as much as people expected four years ago. "Because batteries represent the most cost in an electric vehicle," he said, "it's no surprise that like all EVs, the Cybertruck has simply gotten more expensive to make."
Tesla wasn't the only company unable to hold firm on its entry-level electric pickup pricing. The entry-level Ford Lightning was originally priced in the same ballpark as the Cybertruck, and while a handful of base models were sold for just under $42,000, a series of increases quickly saw the truck's price rise considerably.
By spring 2023, the least expensive Lightning retailed for more than $61,000, nearly matching the 50% increase for the Cybertruck. Ford revised Lightning pickup prices again in summer, slicing $10,000 from the Pro's price. Still, the model's initial ask remains 25% higher than it was at launch.
Manufacturing the Cybertruck Is Complicated
The ability to keep the Cybertruck near its projected $40,000 price point hinged on economies of scale. Tesla needed to build and sell high volumes of the pickup — Musk put the number at about 250,000 per year — to be cash-flow positive. The company now acknowledges that getting to that scale of production won't happen until 2025 at the earliest, due in large part to the complexity of manufacturing the vehicle.
In an October 2023 earnings call, Musk said of Tesla: "We dug our own grave with the Cybertruck," admitting that it's much more difficult to be immediately profitable with a new product.
Beyond the cost of its batteries, what makes the Cybertruck expensive to build is its stainless-steel skin. The body panels required Tesla to design and commission a hot stamping machine — claimed to be the largest in the world — before it could move the pickup into production. Hand-built prototypes of the vehicle, which were used as proof-of-concept models, couldn't meet Tesla's own torsional stiffness requirements.
There have also been reports of development roadblocks related to systems as diverse as the Cybertruck's brakes, its suspension, and its steering, each of which required additional investment and slowed the vehicle's time to market.
If it were to actually hit its 250,000-units-per-year target, the Cybertruck would be outperforming the F-150 Lightning's to-date sales by about a factor of 10. Even excluding the economic issues that have led to increased production and manufacturing costs, this indicates the intense demand that would have been necessary for Tesla to have been able to meet the earlier $40,000 price.
Until then, the company will need to generate as much profit as possible off each Cybertruck sold, which means more-expensive models are the order of the day.
Adding to Tesla's challenges: The plant that builds the pickup is currently capable of producing just 125,000 units per year when running at full capacity.
"In a nutshell," Kim said, "the $40,000 base price never sounded realistic to begin with, given the Cybertruck's construction and features."
Rivals Are Also Charging More for Their Trucks
The final piece of the Tesla Cybertruck pricing puzzle relates to market conditions. Ford isn't the only company making a competing electric pickup truck. Rivian has the R1T, and GMC has the Hummer EV. The Chevrolet Silverado EV, the GMC Sierra EV, and the Ram 1500 REV are soon to arrive in showrooms.
Despite price fluctuations for the base model Lightning, prices for the Ford's mid-range and high-end trim levels have remained relatively consistent, with versions of the truck going for around $75,000 to $99,000. The least expensive Rivian R1T starts at $73,000, but the truck's price can easily stretch past the six-figure mark, while the Hummer EV's base price is $98,000.