Elon Musk Addresses Cybertruck Production Challenges, Promises Easier Production for Next-Generation Tesla

During Tesla's Q3 2023 Earnings Call, Elon Musk Discusses Challenges with Cybertruck Production and Eases Expectations

Tesla’s Q3 2023 earnings call was marked by a strong focus on the eagerly anticipated Cybertruck, with investors and analysts posing numerous questions, primarily related to production challenges for the electric truck.

Elon Musk acknowledged the complexities associated with the Cybertruck’s production and emphasized the need to “temper expectations.” He stated that it will take between one year and 18 months before the Cybertruck becomes a significant, positive cash flow contributor due to the unique challenges it presents during the production ramp-up.

Fortunately, Musk expressed optimism about Tesla’s next-generation platform, which will serve as the foundation for the forthcoming entry-level EV priced at £22,000 and the envisioned robotaxi. He noted that the new platform is designed to be much more straightforward to manufacture.

In response to questions about whether a similar production ramp as the Cybertruck should be anticipated, Musk explained that the next-generation platform is more conventional compared to the Cybertruck. He highlighted that the high-volume, low-cost smaller vehicle is being designed with a strong emphasis on simplification to achieve an industry-unprecedented level of production efficiency.

During the earnings call, Musk also provided insights into the design of the next-generation vehicle. He described it as “cool” and “beautiful” but with a strong focus on utility. The vehicle’s design, while attractive, is primarily geared towards practicality and efficient transportation.

When asked about the timing of the next-generation vehicle, Musk indicated that Tesla will not provide specific information at this time.

Interestingly, Tesla reiterated its intention to manufacture the next-gen vehicle at the new Giga Mexico plant, emphasizing the ongoing work on infrastructure and factory design in parallel with the vehicle’s engineering development.

However, no mention was made of Tesla’s reported plans to potentially change the initial production location for the next-generation EV from Mexico to Austin, as mentioned in Walter Isaacson’s ‘Elon Musk’ biography.

Elon Musk also discussed the cautious approach being taken with the new factory in Mexico, stating, “In Mexico, we’re laying the groundwork to begin construction, but I think we want to just get a sense of what the global economy is like before we go full tilt on the Mexico factory.”

He expressed concerns about the current high interest rate environment, noting that high or rising interest rates could pose challenges for potential car buyers, as many rely on financing when purchasing vehicles. The economic landscape and interest rates are key factors Tesla is closely monitoring as they proceed with their production plans.