Tesla Cybertruck's Disappointing Performance in 2024: Expectations vs Reality

The Cybertruck: A Financial Perspective

A few months before the first Cybertrucks were delivered to customers, Tesla CEO Elon Musk had a candid conversation with investors regarding the vehicle's financial implications. Musk stated that while the Cybertruck was an impressive product, it would take around a year to 18 months before it contributed positively to cash flow.

Demand and Reservations

During his October 2023 investor call, Musk emphasized the overwhelming demand, claiming that over 1 million people had reserved the car. However, more than a year later, that enthusiasm seems to have waned.

Production and Sales Figures

In 2024, Tesla released its fourth quarter production and delivery numbers, but did not disclose specific Cybertruck figures. Instead, they categorized their vehicles as "other models," which included the Model S, Model X, and Cybertruck. Tesla reported a total production of 94,105 vehicles and delivered 85,133. Estimates suggest that the Cybertruck sales could range between 35,000 and 50,000 units within that total.

Comparative Market Performance

According to Kevin Roberts, director of economic and market intelligence at CarGurus, expectations significantly influence how consumers view the Cybertruck's performance. If one anticipated the Cybertruck to compete directly with mass-market models like the Ford F-150, it has not met those expectations. However, when compared to other lifestyle pickups, the performance appears more favorable.

Year-over-Year Decline

Despite the initial hype and momentum, the Cybertruck's contribution to Tesla's overall growth in 2024 has been minimal. The company reported its first year-over-year sales decline in over a decade, a signal that the demand Musk once boasted about may not have translated to sales.

Musk's Claims and Market Reality

While Musk claimed that more than 1 million reservations had been made for the Cybertruck, the reality is that many of those reservations did not lead to sales. The decision to reduce the deposit from $1,000 to $100 likely attracted more speculative buyers and may have inflated initial reservation numbers.

Challenges and Roadblocks

The Cybertruck has faced its share of challenges, including viral videos of vehicles bogged down in snow and sand, as well as numerous recalls—seven since its launch in December 2023, with notable issues related to the accelerator pedal.

Sales Performance Over Time

Despite these challenges, the Cybertruck had a solid start, emerging as the best-selling electric truck in Q2 of 2024 and the third-best-selling EV overall in Q3. However, analysts suggested those figures might have resulted more from clearing pre-existing orders rather than a surge in demand.

Used Cybertruck Market Dynamics

As 2024 progressed, it became apparent that the Cybertruck's sales may have peaked. Reports indicated an increase in the number of Cybertrucks in used car lots, coupled with a drop in their average sale prices. The average price fell from $107,800 to $104,300 in just one month, as concerns grew over the vehicle's demand.

The Pricing Dilemma

New Cybertrucks are not cheap, with leasing options starting at around $900 a month, while purchase costs for a base all-wheel-drive model are around $90,000. Although the Cybertruck recently qualified for a $7,500 federal EV tax credit, its future remains uncertain, especially with speculation that the credit could be eliminated in the upcoming political landscape.

Conclusion: The Cybertruck's Future in Jeopardy?

While Musk remains optimistic about the Cybertruck turning into a significant cash flow contributor within the next year, 2025 presents challenges that could hinder its path to success. Instead of introducing a more affordable EV, Tesla continued with a polarizing vehicle that may never achieve the sales volume of its predecessors. Analysts stress the importance of recognizing the Cybertruck as a niche product rather than a mass-market winner, contrasting it sharply with more successful models like the Model Y.

Call to Action

As Tesla navigates these challenges, potential buyers and investors are left to watch closely. What are your thoughts on the Cybertruck's performance and future? Join the conversation and share your insights!