Saving the CyberTruck - My 2 Cents to the World's Richest Man
Saving the CyberTruck - My 2 Cents to the World's Richest Man
“We dug out our grave with CyberTruck” declared Elon Musk just days ago. Fortunately, there may be a way for Tesla to avoid the non-enviable fate of its competitors in the EV truck market.
The post in a nutshell: “We dug out our grave with CyberTruck” declared Elon Musk just days ago. This baffled many, yet did not come as a surprise to others. It’s nearly 4 years ago that the vehicle was unveiled. There was huge excitement at the time. Imagine: an electric truck, with a completely novel look, a decent range and competitive pricing. But while there is still excitement, there appears to also be real problems with the vehicle - as Musk would not have used used the expression "We dug out our grave." In this post, we review the huge problems experienced by Tesla's competitors in the nascent EV truck market. Then we move to the issue of batteries, which are the Achille heel of EVs in general, and (heavy) EV trucks in particular, which require lots of power to be displaced. While Tesla is using a house-made lithium-based battery for the CyberTruck, we argue that another technology would be much more appropriate, especially for its base version. Actually, the technology would be much more appropriate for the base versions of all Tesla models, and also for other automakers. The technology, which is already used by China-based leading EV producer BYD, consists of lithium-free Sodium-Ion batteries, which are much cheaper and much safer, among many advantages. Sodium-Ion batteries appear to be the future of EVs, and Tesla may be missing the boat. It's all explained below.
“We dug out our grave with CyberTruck” declared Elon Musk just days ago.
This baffled many, yet did not come as a surprise to others.
It’s nearly 4 years ago that the vehicle was unveiled. There was huge excitement at the time.
Imagine: an electric truck, with a completely novel look, a decent range and competitive pricing.
Whether you need a truck or not, driving a CyberTruck is ultimate vanity. It would obviously make your neighbor salivate big time and make you feel a bit like none other than Elon Musk.
The most re-watched section of this video is interestingly when the “unbreakable” armor glass window got instantly smashed.
People laughed, didn’t take it seriously, but retrospectively, this may have been a warning that major problems were to come with the vehicle.
The announced pricing ranged from US$39,000 for a real wheel drive with 250+ miles range, to US$69,000 for an all wheel drive with 500+ miles range.
The daring look of the vehicle, Musk’s charisma and the competitive pricing brought some 1.9 million people to reserve the vehicle.
Tesla hopes to make more than 125,000 CyberTrucks annually. According to Reuters, Musk said the potential was for 250,000 units in 2025.
[See references from insideevs, topelectricsuv, reuters]
Reserving the vehicle was no big deal as it only involved a refundable US$100 deposit.
Now, we know that “pilot production” of the CyberTruck has started at Tesla’s factory near Austin, and first deliveries are expected from November 30 this year.
The actual pricing appears yet to be announced, but can be expected to be sharply higher. (beware: there are fake leaks on social media)
Despite the lengthy delays, and the expected much higher price, Musk warned that the CyberTruck won't be profitable until 2025.
It looks like the CyberTruck equation is not yet fully resolved. Profitability may be reached in 2025, but maybe it won’t, as there are so many uncertainties.
Major Problems Faced by CyberTruck Competitors
Tesla’s electric truck is not the only one on the market.
Edmunds noted in January last year:
“We wouldn't hold it against you for thinking the Cybertruck is simply all hype at this point. But with competition from Ford and GM looming on the horizon, and with Rivian R1T deliveries already started, Tesla's Cybertruck might have an uphill battle when it does come to market.”
So let’s briefly review how the competition to the CyberTruck is doing.
And the question to keep in mind while reading is: can Tesla do drastically better than its competitors?
Ford F-150 Lightning
The vehicle has a price range from US$51,990 to US$93,990. Battery capacity is 98 kWh. The weight of the vehicle is: 6,015 lbs.
Ford is the truck market leader in the world, with the F series selling some 653,957 trucks in the US in 2022. Since its launch in May 2022, Ford sold some 15,617 F-150 lightning trucks. Electric trucks don’t even represent 5% of the F series sales.
So during the months it was on the market in 2022, the Lightning sold at approx 2000 units per month. In Q3 2023, sales were sharply down, at approx 1200 vehicles per month, while the production capacity and target is 12,500 units per month.
Ford announced last week it was laying off 700 workers at its F-150 Lightning plant, as “there's some evidence that the layoffs may be the result of underwhelming demand.”
“It doesn't take a rocket scientist to figure out that our sales for the Lightning have tanked" asserted a UAW leader.
According to this report, Ford is losing some US$ 60,000 on each F-150 Lightning, which are said to be “bankrupting” the company.
The company had to increase the MRSP starting price from US$41,000 to just over US$61,000, i.e. a 50% increase in just a year.
For its part, the price of the gasoline version of the vehicle starts at MRSP US$43,325.
Ford is now planning to boost its hybrid sales. Hybrids are seen as kind of a “bridge” to EVs.
Ford plans to double production of a hybrid version of its F-150 pickup truck amid slower-than-expected sales of the automaker's all-electric vehicles, according to this CNBC report.
Jim Farley, CEO, Ford, recently stated: "We have been surprised, frankly, at the popularity of hybrids."
Farley mentioned how the Maverick Hybrid sales accounted for 60% of the total model's sales.
Ford is expected to introduce more hybrid options in its line-up over the next 5 years.
Ford has experienced major problems with hybrids in the past, including the hybrid Maverick truck, yet is much more enthusiastic today about hybrids than about EVs.
Chevrolet Silverado EV
This vehicle was announced in January 2022 at a price, for the base model, of just under US$ 40,000. The vehicle was said to be available for purchase in the fall of 2023, but has not hit the market yet.
Reuters reported just days ago that GM “will delay production of electric pickup trucks at its plant in Michigan's Orion Township by a year as the No. 1 U.S. automaker grapples with flattening demand for electric vehicle.”
The move is the latest sign that electric vehicle production and demand may not be as strong as forecast…. The company said the plan now is to start it in late 2025.”
Regarding battery size, “There’s no denying the standout feature of the Silverado Work Truck is its huge, honking 200+kWh battery.”
“To put it into perspective, it is 50% bigger than Ford’s F-150 Lightning long range battery at 131kWh and double the under 100kWh standard range battery.” writes Electrek.
The report notes that the announced range of 450 miles is 40% higher than with the Ford Lightning (300 to 320 miles, according to the model) and also much higher than that of the Rivian T (328 miles).
Interestingly, the report notes that “Chevy will not be selling a Silverado EV starting under $40,000 like they originally planned,” indicating huge price increases: $77,905 for the 450-mile work truck, and $72,905 price tag for the 350+ mile version.
Time will tell what will be the actual pricing when the vehicle becomes available in late 2025 … or later … or …
Let’s mention here the GMC Hummer EV, which is priced from US$98,845. The battery pack capacity is 200 kWh. Gross weight is 9,063 lbs.
To date, sales of this model have been very low: less than 50 units during Q2 2023.
Rivian R1T
The vehicle price starts at US$78,000, said to deliver some 260 miles range. The longer range “max pack” option starts at US$ 94,000, said to deliver some 400 miles range. Battery capacity, for the “max pack” is 149.0 kWh.
Curb weight of the vehicle is 5,886 lbs.
In the third quarter of 2023, the company produced some 16,000 EVs, including its pickup truck and its SUV. It’s not clear what’s the share of pickup trucks in this total.
According to this other report: “referring to Rivian's shareholder letter, the automaker's gross profit margin per vehicle has steadily improved quarter over quarter. While Rivian lost over $32,500 per vehicle in Q2, in Q1 it was losing $67,329 per vehicle, and $124,162 per vehicle in the quarter before that.”
“As long as Rivian continues to increase its production volume and potentially introduce new models, there is a light at the end of the tunnel for the EV start up.”
The report commented the loss of $32,595 for every sold vehicle in Q2: “That's enough money to buy an entire Honda Civic and still have some change left over.”
One can further comment that, at the beginning, when the losses were $124,162 per vehicle, it was 4 Honda Civic cars :)
In 2022, Rivian is reported by the NY Times to have lost US$6.8 billion.
Note that BYD may also put a truck on the market, both in battery powered and plugin hybrid models. The first released images suggest the truck resembles the F-150 Lightning.
EV v. Hybrid Trucks
The detailed specifications of the Cybertruck models have not been announced, yet according to Electrek, the “standard” model would weight less than 6000 lbs while the “performance” model would weight around 6500 lbs.
So there are interesting similarities with the Rivian and F-150 regarding vehicle weight, and battery lithium technology is also similar.
These similarities support the assumption that the actual pricing for Tesla’s CyberTruck is likely to be much higher than what was announced 3 years ago, and that created so much hype and so many bookings.
Before going further, let’s keep in mind that these EV truck prices are through the roof compared to ICE Trucks or even hybrid ones.
For example, the Ford Maverick pickup truck, known for its good fuel efficiency (for a truck), is priced in the range of $22,595 - $28,355, for hybrid gasoline models.
The weight of the Maverick is much lower, at 3,674 lbs.
Fuel efficiency is at 40 miles per gallon (mpg) in city and 33 mpg on the highway.
The curb weight of a non electric (and less fuel efficient) F150 is 4,705 lbs.
In terms of carbon emissions over the life cycle of the vehicle, it remains to be proven that the above expensive EV truck models will emit less carbon. Because of their massive weight and their massive batteries, they may well emit much more.
See our previous article about EV carbon emissions and the widely shared mostly false beliefs that these vehicles reduce emissions, or that they are “zero-emission” vehicles.
These electric trucks are also likely much less environmentally friendly than their ICE counterparts, because of the massive weight of the vehicles and the massive mining of lithium, cobalt, copper and other minerals associated with their manufacturing.
And physics 101 tell us too that the amount of energy required to move a vehicle of 6000 lbs or more is much higher than for a comparable 3,674 lbs or 4,705 lbs vehicle.
CyberTruck Battery Packs
The battery capacities for the Cybertruck models have not been announced.
As we previously covered, battery capacity could be as high as 250 kWh for the performance model.
Another estimate, which may be for the base model, puts it at 120 kWh.
A 250 kWh battery pack would be expected to weight approximately 3100 lbs, i.e. approx 1.4 tons! Yes, that is the weight of about 20 people!
For the standard model, the battery pack would weight half of that, i.e. approx. 1500 lbs. or 700 Kg.
According to a Tesla Space analysis, Tesla does not even use the best available lithium-based battery for the CyberTruck. Instead, the house-made “Tesla 4680” Lithium-based battery is used. The presented analysis suggests this battery offers 13% less energy density than the Panasonic battery typically used for Model Y. Energy density is estimated at 229 Wh\Kg for the Tesla 4680 battery, in its current generation.
Why is it important?
As we discussed previously, batteries are the Achille’s heel of electric vehicles.
The batteries needed to power trucks are considerable, and constitute not only a big share of the price of these vehicles, but also a big share of their weight, which makes them even harder to displace.
Such trucks, like the equally heavy luxury electric SUVs, are NOT energy efficient. They require huge energy resources not only to be built but also to be driven on the road.
A CyberTruck is not an iPhone: the mineral resources associated with the batteries (lithium, cobalt, etc.) are considerable.
Who Will Drive the CyberTruck?
When you talk with people who use a truck for work, for transporting materials or equipment, for being on the road day in day out, EV trucks are usually not an interesting proposition.
Beyond the considerably higher price, these people have no time for long charging stops, for doing careful planning for their journeys.
Towing is also a known issue for electric vehicles, with range typically considerably shortened when towing.
So, for most people who actually need a truck for their work, such electric vehicles are not on their radar screens.
And they certainly have no time for experimenting with a new vehicle, which undoubtedly will have significant growing pains.
Here is guess. It may be mostly high-income white collar professionals who will primarily seek buying EV trucks, especially the CyberTruck, rather than people who actually need a truck for work.
An example of such potential drivers of the vehicle is non other than … Elon Musk :) This is a video from yesterday at the Texas F1 Grand Prix.
There is no information available about the profiles of the 1.9 million people who are said to have reserved a CyberTruck.
It’s likely that many of those people, maybe a large majority of them, will have by now opted for another vehicle, or will be turned off by the anticipated price increase, the long waiting list or whatever other issue, or simply the vanishing hype.
There are other issues that may reduce the demand for the CyberTruck. One of them is that there are income limits and price caps for the EV tax credits in the US.
The limit on the vehicle MRSP price is US$80,000.
The maximum annual income for a single person is US$150,000 and US$225,000 for the head of a household.
There are various other constraints. The tax credit per vehicle is maximum US$7,500.
Another kind of issue has already been highlighted in France, and may apply to other countries. Given the weight of the vehicle, a special driving license for heavy vehicles may be required, which will likely be a turn off for many.
As production initially is on a “pilot” basis, few units will be produced and those will most likely find buyers. Actually, it may be first Tesla employees, who will test the vehicle in real world situations.
But what will happen afterwards in terms of market demand is anyone’s guess at this point.
Higher Prices, Further Price Increases to be Expected
We already saw, with the F150, the Silverado and the Rivian how pricing has steeply increased from their announced pricing when the vehicles where unveiled.
This is expected to occur with the CyberTruck. Moreover, there is likely to be further price increases, because of the high impact of mineral costs, which are expected to rise in the coming years.
Pricing of truck and other heavy EVs is very much impacted by the production cost, the battery cost, which in turn largely depends on the cost of minerals such as Lithium, Cobalt, Manganese, etc.
Batteries can easily represent 30% of the production cost of electric vehicles. Minerals can represent 80% of the battery costs.
So there is a huge dependency on the market prices of these minerals, which not only fluctuate but are also expected to rise in the next decades, because of growing demand and limited increased production in mining.
This is all well explained in Mark Mill’s Manhattan Institute report published last July.
So, let’s hypothesize that CyberTruck’s base model price will be US$ 60,000 (50% higher than announced, similarly as with the F150 lightning price increase) and battery cost is US$20,000 (30% of the vehicle’ price).
Then, an increase in mineral prices of say 25% would require a US$ 4,000 increase in the retail price. If the mineral price increase is 50%, we are talking about a required US$ 8,000 price increase.
For their part, the gasoline and diesel counterparts of those trucks are certainly negatively impacted by the increases in fuel prices, but their purchase price is considerably lower, and no such price increases are to be expected.
Note that there is a well developed second-hand market for ICE vehicles, unlike for EVs. As we previously discussed, the typical limited battery life of EV batteries (8 to 10 years) makes purchasing secondhand EVs very risky, as one needs to foresee a highly likely and highly expensive battery replacement.
And of course, there is inflation, increasing labor costs, etc. that will also lead to further price increases.
Why Should the Cybertruck be Saved?
Tesla and its CEO know they have a major problem. The most profitable automaker on earth would otherwise not have declared “We dug out our grave with Cybertruck”!
Fortunately, the world does absolutely not need CyberTrucks. And Tesla doesn’t even need them either!
Before we explore what could possibly be done to “Save the CyberTruck,” lets mention/repeat important caveats:
The CyberTruck is not an environmentally friendly vehicle, because of the huge energy needed to move it around, and also of course, because the massive battery, which considerably increases the overall weight of the vehicle, compared to an ICE vehicle. A CyberTruck is not a zero emission vehicle. There are no ecological reasons to have CyberTrucks around.
The CyberTruck certainly is a wild, extravagant, possibly outrageous vehicle, that generated hype in very narrow, very well-off, segments of society, but it’s obviously not a vehicle for everyone, very far from that. Even if it’s one of the very few EV trucks on the market, it looks mostly geared toward a niche market, likely largely composed of people who don’t need a truck for their A to B car journeys.
The CyberTruck is very remote from facilitating affordable mobility. From a societal perspective, what’s really important is to have cars and trucks that most can afford. For trucks, the premium to be paid to drive EVs instead of similar internal combustion engine vehicles is totally insane. This goes against the very goal of affordable mobility.
According to a 2011 study published by the National Bureau of Economic Research, a 1,000-pound difference between vehicles results in a 47% increase in the likelihood that a crash turns deadly. The excess weight increase of an EV truck, compared to an ICE version, can easily exceed 1,000 pounds, which means such vehicles do pose a safety issue. It’s not the passengers of these vehicles who are more likely to be injured or die, but those of other vehicles and pedestrians.
So the CyberTruck does not appear to have been a great idea, especially as it seems mostly geared to people who don’t even need a truck.
There is therefore no strong reason to save the CyberTruck.
The world would not be a worse off place without the CyberTruck.
And there is a significant risk that Tesla will actually be worse off, if the plug is not pulled right away from the CyberTruck experiment.
How to Save the CyberTruck?
Now, let’s explore what could be a solution for saving this wild, extravagant and possibly outrageous electric vehicle.
The solution I will outline is certainly well known by Tesla engineers, but seems to be currently discarded (there are no leaks to the contrary floating on the Internet), while Tesla’s main competitor on the world stage, BYD, has already started embracing it.
BYD is indeed starting using this technology for its very affordable Seagull models, priced in China at US$11,300. The model has by the way seen the involvement of a former Lamborghini designer, which explains its daring lines.
The new technology adopted by BYD and others is the use of Sodium-Ion batteries, and it’s not just a theory, it’s already a reality.
It’s this reality that Tesla could swiftly embrace and implement, not only for the CyberTruck but for its full line up of EVs, starting with the base versions of each model.
If you are not familiar with Sodium-Ion batteries, please watch these videos, which, while not fully up to date, are relatively recent and insightful.
Tesla has already done a battery switch, in 2021, but to LFP / Lithium Iron Phosphate batteries, for it’s base models. Today’s Sodium-Ion batteries are very close, and will soon be better, than LFP batteries, in terms of energy density, i.e. the mass of battery needed to contain a certain amount of energy.
“LFP has both positive and negative trade-offs,” “It’s significantly cheaper and doesn’t require any nickel or cobalt. It’s also more stable, which makes it safer,” said at the time Sam Abuelsamid, Guidehouse Insights principal analyst, who also referred to their lower energy density as a downside.
Today’s Sodium-Ion technology delivers an energy density that is very similar to the LFP batteries, at around 160 / 180 Wh/kg. The next generation is expected to be superior, at 200 Wh\Kg, i.e. better than the LFP technology.
See also this December 2022 article titled “Next generation sodium-ion battery: A replacement of lithium.”
For the CyberTruck, transitioning to Sodium-Ion battery packs would involve only one or two more years of wait time. That’s not much, as nearly 4 years have already elapsed since the wild beast was unveiled.
A Bold Move to Make Now!
The solution to “save the CyberTruck” is to make the bold move of completely changing battery technology, and adopting Sodium-Ion batteries, at the very minimum for the base model.
What would be the advantages of a bold move to Sodium-Ion batteries? They are many and they are all explained in this post.
A Bold Yet a Strategic Move Too
As Sodium-Ion batteries may be, or actually are, the EV revolution in the making, it would be absurd for Tesla not to, at the minimum, test them, for example with its … CyberTruck.
Tesla can certainly get into the production of efficient Sodium-Ion batteries within a very reasonable time frame of one or two years.
While the capacity gap with Lithium based batteries has already been much reduced, there is still scope for improvement of the technology, and Sodium-Ion batteries will soon be superior to the LFP batteries presently used by Tesla.
Existing Tesla battery factories, such as those in California or Nevada, would likely be suitable for producing batches of Sodium-Ion batteries. No big capital expenditures would be needed.
Sodium-Ion batteries is a major technological change in the world of EVs, and will have huge, positive, impacts for Tesla and other EV manufacturers.
Adopting these batteries will also have huge implications in terms of the supply chain for the required minerals and the required future investments.
To paraphrase Churchill, there may be a great opportunity in the considerable difficulty presently faced by Tesla with its CyberTruck.
Opting for Sodium-Ion batteries may be the decisive factor that will make CyberTruck fail or succeed.
These were my 2 cents to the world’s richest man :)
See our previous yet recent and still up to date analysis about EVs on posts such as:
