Could delayed Tesla Cybertruck be a Big Money Maker?
Thursday, December 16, 2021 | Chimniii Desk
Key Highlights
- Tesla recently announced that manufacturing of its Cybertruck electric pickup truck would be delayed about a year, to the end of 2022, due to the automotive industry's persistent supply chain challenges.
- Tesla's Cybertruck revenue is expected to reach over $400 million in 2023, growing to approximately $5 billion by 2026.
- Tesla recently presented its first all-electric pickup vehicle, called "Cybertruck," with a radical design and costs starting at roughly $40,000.
- While the Cybertruck appears to have remarkable technology and performance, it is unknown whether traditional truck owners, who are notoriously brand loyal, will be attracted to the vehicle.
- According to our predictions, the car may boost the company's income by more than $4.5 billion by 2025.
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Tesla recently announced that manufacturing of its Cybertruck electric pickup truck would be delayed about a year, to the end of 2022, due to the automotive industry's persistent supply chain challenges. Thus, would the new truck be a significant revenue generator for Tesla once deliveries begin in 2023? We do not believe so.
Tesla's Cybertruck revenue is expected to reach over $400 million in 2023, growing to approximately $5 billion by 2026. To put this in context, that's likely less than 2.5 percent of Tesla's estimated revenue in 2026. For an overview of our methodology, please see our dashboard analysis Cybertruck revenue potential.
Although the pickup truck industry in the United States is rather vast, with the top five manufacturers selling close to 3 million units per year, Tesla's Cybertruck, with its radical design, appears to be a relatively niche product.
Tesla, for example, has previously stated that Cybertruck sales could fall below those of its premium Model X and S vehicles, which have generally sold less than 100,000 units each year. Additionally, competition is fierce. Rivian's R1T pickup truck has received amazing reviews, with MotorTrend naming it the 2022 Truck of the Year and describing it as "the most incredible truck" it has ever driven.
Investors have also bought into the storey, valuing Rivian at more than $100 billion. Similarly, mainstream truck manufacturers are experiencing success with their electrification plans, with Ford seeing strong demand for its electric version of the classic F-150. Customer loyalty is also extremely high in the truck business, which means Tesla may have a difficult time acquiring existing owners.
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By 2025, Tesla's Cybertruck might generate over $4.5 billion in revenue.
Tesla recently presented its first all-electric pickup vehicle, called "Cybertruck," with a radical design and costs starting at roughly $40,000. Tesla's interest in the market is unsurprising, considering that pickup trucks have historically been a profitable segment for automakers, with General Motors previously estimating that it earns up to $17k in pretax profit on larger pickups that generally retail for $50k.
While the Cybertruck appears to have remarkable technology and performance, it is unknown whether traditional truck owners, who are notoriously brand loyal, will be attracted to the vehicle. According to our predictions, the car may boost the company's income by more than $4.5 billion by 2025.
To put this in context, this would represent less than 20% of the company's 2019 revenue and around 55% of the expected Model X and S revenue for this year. We present a quick summary of the US truck market and assess the possibilities of Tesla's Cybertruck in the sections below.
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Analyzing The Cybertruck's Potential
The Cybertruck is likely to generate less interest than Tesla's other goods.
- According to reports, the Cybertruck took three days to obtain 200k bookings, compared to one day for the Model 3, despite the dollar deposit being a hundredth of the Model 3's.
- Due to the high level of brand loyalty in the truck sector, Tesla may have a difficult time acquiring existing owners. For example, Ford trucks enjoy a return rate of approximately 70%, compared to 51% for Ford cars.
- Tesla has been cautious about the truck's chances, noting that its long-term sales may be lower than those of the Model S/X (which sell 100k units per year).