Cybertruck’s Rocky Start: Sales Lag Behind Musk’s Ambitious Projections
The latest recall of Tesla’s Cybertruck, aside from revealing the use of incorrect glue, has brought to light a stark reality: the electric pickup’s sales are significantly below expectations. Since customer deliveries began just over 14 months ago, Tesla appears to have sold approximately 46,096 of these 7,000-pound vehicles.
This figure contrasts sharply with the optimistic sales predictions made by Elon Musk. Just weeks before the Cybertruck’s rollout, Musk told investors he anticipated Tesla would sell 250,000 Cybertrucks per year.
During an earnings call a month before the November 2023 launch, Musk boasted of “over 1 million” Cybertruck reservations, declaring that “demand is off the charts.” These “reservationists” initially paid $100 to join the queue, a refundable deposit later increased to $250. While car companies often open waitlists for models expected to outstrip supply, a significant portion of those who lodge deposits typically don’t complete the purchase.
“The automotive industry aims for a conversion rate of around 2 to 16 percent on reservations,” noted Stephanie Valdez Streaty, director of industry insights for Cox Automotive. Based on this, Tesla’s conversion rate sits just under 5 percent. This is at the lower end of the conversion spectrum. Given Tesla’s historical sales success, many experts view this as a disappointing outcome.
Analysts, moreover, tend not to evaluate the world’s wealthiest automaker in the same way as they would a conventional car company. Tesla’s stock trades at a premium, valued many times higher than companies with greater vehicle sales volumes.
If manufacturing capacity is a reliable indicator of sales expectations, then Tesla must be disheartened, as the Texas Gigafactory, where the Cybertruck is assembled, has the ability to build over 125,000 of these trucks annually. According to a Business Insider report from January, poor Cybertruck sales caused workers to be moved from the “Cyber” production line to a Model Y line.
Tesla’s present high valuation is not based on its current sales but on projected sales of yet-to-be-launched robotaxis and humanoid Optimus robots, which, mirroring the Cybertruck, could still be several years away from mass production.
“My predictions have a pretty good track record,” Musk stated at an all-hands meeting on March 20. However, no one present seemed willing to inquire whether he predicted the mounting criticism, or anti-Musk backlash, that is impacting Tesla’s sales worldwide.
While Musk claimed Tesla is “by far the most innovative company in the car industry” during the staff meeting, the reality is more complex. Chinese automakers such as XPeng, Nio, and Li Auto are making significant strides in autonomous driving and other technologies.
Waymo is already offering driverless taxi services. Furthermore, Tesla isn’t the only company with plans for humanoid robots. Peter Diamandis stated on a recent TechFirst podcast that 15 other companies are involved in this race, none of which feature a leader as contentious and divisive as Musk.
Musk has also expressed his vision for the Optimus robot, stating, “This year, we hopefully will be able to make about 5,000 Optimus robots,” and claiming Tesla would make “probably 50,000-ish [Optimus robots] next year.” He further asserted that Optimus “will be the biggest product of all time by far—nothing will even be close. It’ll be 10 times bigger than the next biggest product ever made. Ultimately, I think we’ll be making tens of millions of robots a year.” He then raised the stakes further, suggesting a production rate of “maybe 100 million robots a year.”
These ambitious predictions appeal to Tesla enthusiasts who trust Musk’s assertion that he “knows more about manufacturing than anyone currently alive on Earth.” However, the fact remains that Musk oversees a car manufacturing company that couldn’t even specify the correct grade of panel glue for the Cybertruck.
Now facing its eighth recall in the past 14 months, regarding failing windshield wipers, trapped accelerator pedals, and possible power loss to the wheels, Musk’s polarizing, angular pickups are experiencing a sales freefall. Month-over-month Cybertruck sales decreased by 32.5 percent in February, as estimated by Cox Automotive.
“The Cybertruck generated significant buzz with its unique design and ambitious specifications,” stated Cox’s Streaty, adding that “sales have fallen short of expectations due to higher-than-promised prices, lower driving range and payload capacity, and production issues. The unconventional design hasn’t resonated with traditional truck buyers, and strong competition from Rivian and Ford has intensified the market.”
Streaty added that the Cybertruck is a “niche product with a unique design and high price point, which may not resonate with mainstream consumers. Additionally, recalls and quality concerns can significantly undermine customer confidence and sales, posing a substantial challenge for the Cybertruck’s market success.”
When unveiled in 2019, Musk initially promised the production vehicle would launch within two years and that the base model would start at $39,900. At the actual launch in 2023, the base model cost $21,000 more than that. The Foundation Series model cost an extra $20,000, despite offering no physical differences aside from a distinct logo, with nonphysical advantages that included lifetime cellular connectivity and “free” access to Tesla’s Full Self-Driving (Supervised) system.
Experts estimate that Tesla invested at least $2 billion in the Cybertruck’s development. Olav Sorenson, professor of strategy and sociology at UCLA and faculty director of its Price Center for Entrepreneurship & Innovation, has estimated that a more conventional car might need to sell 200,000 units annually to cover its research and development costs.
Sorenson calculates that the Cybertruck, due to its stainless steel body and unconventional construction, might require as many as 300,000 sales per year.
Given current sales levels, Tesla “probably loses money on every one,” claims Sorenson. “It’s an innovative vehicle, but whether such an unusual design would appeal to consumers has always been a gamble. The DeLorean, the original stainless steel car, sold only about 9,000 units. Even more mainstream cars with unusual designs, such as the PT Cruiser, have struggled to reach profitable sales levels.”
This rapid decline in demand could be partly attributed to the Cybertruck’s now-notorious quality-control issues. “When we launched reservations for the Valkyrie, we knew that this would be a highly desirable car due to its limited production and the personnel involved in the car’s development,” said former Aston Martin CEO Andy Palmer. “People could rely on Aston and knew [the new car] was something we’d deliver. For the Cybertruck, we’ve seen a string of delays and a moving of the goalposts, which conveys a lack of reliability, and if the OEM isn’t reliable, why should customers be?”
A reservationist from northern Maryland, who was drawn in by Musk’s early promises of an electric pickup, spoke to WIRED anonymously. “I was planning on buying a truck and wanted my next vehicle to be electric,” he said. “At the time, the Cybertruck was the only EV pickup that seemed like it would be available soon. I placed an order with $100 refundable for the mid-tier one, but then the Cybertruck took much longer than originally promised, so I canceled my reservation.” He did not regret this decision. “With the events of the last couple of years, and especially the last couple of months, I would never now consider buying a Tesla vehicle.”
For many reservationists, the price hike was a deal-breaker. “The Cybertruck was promised to start at $39,990 when the initial reservations began—a stratospheric difference from the $99,990 Foundation Series trucks that were first available,” said Joseph Yoon, consumer insights analyst at Edmunds. “Even the cheapest base model now has an expected base MSRP of $60,990, and it’s likely that not many customers are willing to bridge the vast pricing gap.”
According to Kelley Blue Book estimates, Tesla sold a mere 38,965 of the angular EVs last year. In January, Tesla introduced discounts to clear Cybertruck inventories, with Foundation Series models still in stock, despite Tesla supposedly stopping sales in October.
Tesla is now offering low financing rates to boost Cybertruck sales, and has reportedly buffed out the badges on Foundation Series vehicles to sell them as regular models. To move more Foundation Series Cybertrucks, dealerships have also listed incentives such as free lifetime Supercharging, with the electric pickups also piling up on used-car lots.
Tesla, which did not respond to a request for comment on this article, is facing a “brand tornado crisis moment,” says Dan Ives, a Tesla bull. The company’s shares have dropped nearly 40 percent since the start of the year, as the animus directed at Musk adds to other challenges Tesla is facing, including a jaded lineup of offerings, the Model Y Juniper excepted. Any novelty that may have boosted the Cybertruck’s initial sales has now most certainly worn off.
Earlier this year, a research note issued by Morgan Stanley cited “decelerating Cybertruck volumes” as a reason for lower expectations for 2025 Tesla volume growth. Swedish billionaire and hedge fund manager Christer Gardell issued a warning about Tesla stock, saying its valuation could drop drastically.
“Tesla,” said Gardell, “is probably the most expensive stock on the global stock exchanges right now. It could go down 95 percent—and maybe it should go down 95 percent.”
While some analysts see Tesla as a tech company with extraordinary potential, Gardell views it as merely a car company, unable to understand why the market treats Tesla with such reverence. A crash is coming, he believes.
Ultimately, Musk’s own words may prove prophetic. On a 2023 earnings call, Musk admitted that Tesla had “dug our own grave with the Cybertruck.” If current trends persist, he may very well have been correct.
