Tesla shares have been increasing in value lately on news that Ford and General Motors will use the North American Charging Standard (NACS). It is not very clear how having more vehicles using the Supercharging network with a charging standard that does not pay Tesla a dime will help the company. On the other hand, what the Tesla Files revealed about the Cybertruck development should have made investors tremble. Yet, it hasn't.
Let me remind you of what happened. On January 25, 2022, Tesla's engineering team made an internal presentation about several concerning issues with the alpha prototype of the electric pickup truck. Problems with brakes, handling, body stiffness, sealing, and suspension were so serious that the only solution the engineers could come up with in some cases was to restart from scratch. This damning presentation – among other files – was then retrieved by whistleblowers who wanted to denounce how poorly Tesla protected data from customers, employees, and even its own confidential documents. This scandal is now known as Tesla Files.
Ironically, one day after the engineers presented their findings – on January 26, 2022 – Elon Musk tweeted this: "Been driving latest Cybertruck prototype around Giga Texas. It's awesome!" Considering Tesla must not have built a prototype only for its CEO, either he does not have a clue how a vehicle should drive, or he decided to omit how bad things were at that point. It is difficult to determine which is worse. And this is not even the most shocking part of the whole story.
As you may remember, the Cybertruck was introduced on November 21, 2019, with promises that it would arrive in 2021, starting at $39,990. The vehicle would have a stressed-skin structure and revolutionary 4680 cells. These promises led thousands of customers to pre-order the electric pickup truck. Recent estimates put these reservations at around 1.8 million so far. At $100 a pop, Tesla raised $180 million without having to pay interest rates or deliver anything other than promises.
Almost four years later, the story is now quite different, and these promises are dropping like flies. At the 2023 annual shareholders meeting in May, Musk talked about the Cybertruck and stated that "it's going to be hard to make the cost affordable because it is a new car, new manufacturing method." In other words, the electric pickup truck will be way more expensive than previously thought.
The 4680 cells the Cybertruck will use are just larger NMC batteries that even offer a worse range than 2170 units. The exoskeleton that would allow the Cybertruck not to carry its body and bed "like a sack of potatoes," as Musk said at the vehicle's premiere, is just a unibody. That's what Cory Steuben, from Munro & Associates, said after checking the images of a prototype's structure that Tesla released on its Q1 2023 Update report. The Tesla CEO denied that was the case, but we are yet to confirm if he is telling the truth. The difficulties with the Cybertruck development that the Tesla Files revealed may do that. Another hypothesis is that unibody pickup trucks are just more demanding to design than sedans and SUVs.
With all that now on the table, why did Tesla mention prices it was not sure it would be able to meet? Why did it announce a body structure it may not have been able to develop? Above all, why did it promise to present the production version in two years when car projects usually demand three years? The prototype shown in 2019 suggested development was already underway, so the rest of the process taking two years was not far-fetched. However, the work on an alpha prototype in 2022 suggests development started much later than in 2019 or before that.
The Tesla Files exposed that the BEV maker did not make the Cybertruck's introduction event based on proper industrial planning. It did not have any idea when its electric pickup truck would be ready, how much it would cost, if it would have the construction method it wanted it to have, if the batteries it wanted to use would be ready… None of that was defined. If I said it was based on wishful thinking, that would not seem wrong or unfair in light of everything we now know about Cybertruck's development.
The last nail in this coffin is that the Cybertruck was conceived to give Tesla a competitor in the hottest segment of the American car market. It was supposed to sell buckets of this new vehicle. At the annual shareholders meeting, Musk said that,"in the grand scheme of things, relative to the production rate of all the other cars we make, it will be small. But still very cool." In other words, the high-volume vehicle Tesla was supposed to deliver in 2021 will be a niche product.
If all this came from a legacy carmaker, that would have been enough for shareholders to demand the CEO to step down or pay them compensation for the stock price drop that would undoubtedly follow. In Tesla's case, shares got more expensive.
Fifteen years after the Roadster made its premiere, Tesla is the most valuable carmaker in the world. It can no longer be deemed a startup, but its advocates will still claim that things like Cybertruck's premiere and everything that followed are "growing pains." That sort of leeway is no longer suitable for the BEV maker. It is rather a lame excuse for concerning signs it keeps on sending to anyone willing to read between the lines.
Photo: Chile AI100
When Elon Musk said that "prototypes are easy, production is hard" in a May 3, 2021 tweet, no one could imagine that applied so well to the Cybertruck. If the very first one was not an alpha prototype, what was it? A moving mockup – if such a thing exists? The alpha prototype of an idea that was eventually shelved? Whatever it was, you can indeed say it was child's play – full of promises that will be dismissed with no consequences as time goes by.
Been driving latest Cybertruck prototype around Giga Texas. It’s awesome!