It's because unsold Cybertrucks were stacking up at the factory where they were being built in Texas.
The public market for them as dried up. You seem to be entirely being guided by your personal leaning rather than your journalists' instinct.
If the trucks had a fundamental problem, the last thing Musk would do would be to infect his other business operations with them now. OTOH, if he believed in the product why wasn't he using them? You want find any Ford Trucks at a Chevy plant.
And honestly, those who own them love them. They do have complaints about various things:
- They paid too much.
- They've had about six recalls (Ford trucks have had 109 recalls in 2025, over nearly 8 million vehicles).
- They don't like the 250-280 mile range.
- Some complain about build quality, generally, as is typical on a first-year build.
- They HATE the depreciation, understandably, and predictably.
But most would do it again.
I think there are a couple of misjudgments here:
- When it comes to trucks, brand commitment is very strong. It takes a lot for Ford and Chevy drivers to walk away. As a result, a new market must be created, not customers stolen.
- Musk has correctly analyzed the picture and determined that a certain number of CTs must be sold to prevent it from being a fixed cost loss. Basic managerial accounting and economics. The investment is made, it makes sense to allow to play out with the objective of recovering the fixed costs and hopefully making a variable cost contribution. And perhaps the public will warm to them. This is a very basic business concept.
The more CTs he can put on the road, the better. If he finds some niche markets (like the 10 units at Vegas PD) so much the better -- one never knows when a trend will start.
How this works:
Tesla is in for 2 billion in fixed costs, and have recovered around 3/4 Billion, so their loss by walking away would be around 1.25B (+ cost of capital). Until those costs are recovered, and as long as there is no added cost associated with tying up plant and equipment, they might as well sell what they can -- at the same time, they stand a chance of developing a market. Unless, of course, they could use the productive assets more productively by doing something different. (They actually would have some recovery of cost in other salvage in tooling, dies, and other repurposed items, amounting to maybe 1/2B.)
If he's looking for a way free up capacity, they're not far from it with Trucks sold to his entities. OTOH, he could just be looking to get marketing value from showing the CT is his choice. |
