Tesla recently announced that the long-awaited Cybertruck will start at a lofty $80,000 when initial production begins, price tag has raised some eyebrows, leaving many wondering – why so much for Elon’s electric truck? The answer lies in basic economics: supply, demand, and maximizing profit.
With over 1.5 million Cybertruck reservations already made, demand far outstrips Tesla’s early production capacity. As any Economics 101 student knows, when demand is high and supply is low, prices tend to rise. Tesla is taking advantage of the Cybertruck hype to charge a premium and pad their bottom line during the early production ramp.
But isn’t the whole point of Tesla to accelerate the world’s transition to sustainable energy through affordable electric vehicles? Yes, but it’s also a business whose continued success depends on smart financial moves. As a new model with unprecedented technology, the Cybertruck also carries higher R&D and production costs which must be recouped.
The good news is that as Cybertruck production scales in coming years, prices should come down. This follows the playbook of Tesla’s other models. Remember when the longest-range Model Y cost over $60k in early 2021? Now just 20 months later, the price has dropped to $54k as manufacturing efficiencies improved.
We can expect a similar trajectory for the Cybertruck. What starts as an exclusive, hot-ticket item for early adopters will eventually become more affordable for average truck buyers. Elon himself hinted the sub-$40k Single Motor Cybertruck is 2-3 years away.
So take heart – the people’s truck is still en route. Tesla just needs to fund its journey by starting off upmarket. Production and profit first, accessibility later is the economic formula at play for the Cybertruck. The question is, how long are eager customers willing to wait for those savings to materialize? How many Cybertrucks do you think will Tesla deliver in 2024?