Tesla’s 3-day Cybertruck shutdown deals another blow to Elon Musk

Elon Musk is having a bad, bad, very bad week.

First, the judge rescinded stock grants that Musk had persuaded Tesla shareholders to receive, in part because he threatened to leave the company. That subsidy, originally worth about $50 billion, is now worth $100 billion, thanks to the company’s post-election rally in which its owners went all out for the president-elect.

$100 billion: That’s real money, even for the world’s richest man, who is currently worth $333 billion. The grant would have doubled Musk’s lead over Jeff Bezos, the world’s second-richest person. List of most important billionaires.

But slightly bad news for Mr. Musk’s long-term prospects just leaked out of Tesla’s Austin factory. Cybertruck production appears to be decreasing. Workers on vehicle assembly lines have been told they won’t have to report to work for three days.

According to business insider, There are four sources at factory sites, and this follows several similar slowdowns in October. Needless to say, I took on more cleaning and training work to fill my time, and overtime offers plummeted.

Tesla has not yet commented on the reason for the slowdown, which is not what you would expect from a hard-hit automaker. Car companies typically have most of their sales in the springwhen a potential customer receives a tax refund and their driving situation improves. So if Tesla executives were expecting banner sales within the next few months, the Cybertruck factory should be up and running right now.

Want to buy a Cybertruck?

Instead, Cybertruck inventory appears to be backed up — never a good sign when your job as a business is to change that. That’s not good, especially when you have 2 million pre-orders because it suggests that almost all but 50,000 or so pre-orders weren’t serious. (This seems like a likely outcome, given that the potential customer only had to make a $100 deposit.)

Typically, you move inventory by lowering the price. Tesla instead increased the average price of its Cybertruck (the cheapest trim disappeared from its website in August), even though the 350-mile range turned out to be less than Musk had promised.

This isn’t just a detail that only car geeks will care about. That’s because if any non-Trump-related fundamental is driving Tesla stock growth at the moment, it’s the Cybertruck’s sales growth (while other Tesla models are seeing flat or declining market share). ). According to , around 28,000 units of this strangely angular vehicle were sold in the first three quarters of 2024. Estimated by Cox Automotive (Tesla does not disclose sales figures).

Analysts generally 48,500 Cybertrucks are expected to be sold this yearSo this isn’t a bad score – certainly better than rival electric trucks from Rivian and Ford.

But here’s the $100 billion question. Can Tesla get close to selling 250,000 Cybertrucks a year? That’s the production capacity Musk has been touting. essentially betting on Tesla’s future. Musk’s bet is almost entirely on U.S. trucks, given that the Cybertruck isn’t sold outside of North America and isn’t likely to go on sale anytime soon, given issues with regulators in Europe and China. concentrated on the market.

Since 2 million pickup trucks are sold each year, it’s reasonable to think Tesla could capture an eighth of that total. but can that? Or is reality about to overwhelm Musk’s “if you build it, they will come” approach?

I saw the Cybertruck 6 recalls will occur in 2024a huge number in the automotive industry. The most recent accident occurred just this month. A defective part can cause a loss of power to the wheels.

You’d have to squint really hard to see the Cybertruck as anything other than a recall-related joke. It seems like every week there’s a new report on social media about the woes of Cybertruck owners. oil leak A major system failure occurred while I was away. protein shake. This winter could bring more bad news for Musk, according to Canadian Cybertruck owners. The car died when I tried to defrost it after 2 hours of use..

At least there is one glimmer of hope for Musk. If Cybertruck sales fall off a cliff and Cybertruck starts unloading its Tesla stock, at least the value of Musk’s missed stock grants will be less than $100 billion. The question is whether he will.