When Tesla unveiled its vision for an electric truck in November
2019, it shocked the world.
Like 100 years, trucks have been basically the same.
We want to try something different.
So I present to you the Cybertruck.
Elon Musk has been hyping the Cybertruck as Tesla's best product
ever, and four years later, the first deliveries have begun.
It's very rare that a product comes along that is seemingly
impossible. That people said was impossible, that experts said was
impossible. And this is one of those times.
But getting the truck to market has been challenging.
Musk has repeatedly emphasized how difficult building it has been.
The Cybertruck, I've driven the car.
It's an amazing product.
I do want to emphasize that there will be enormous challenges in reaching volume production,
and then in making the Cybertruck cash flow positive.
We dug our own grave with Cybertruck.
You're building a stainless steel vehicle, which is really been done hardly ever in
the history of the auto industry, and that alone was going to make it challenging.
Stainless steel is tough to tool for.
It's tough to work with, and this is in some ways a really giant experiment, which I
think the whole industry is watching with some interest.
I think they've signed up for another production hell.
We're able to make the the skin out of thick, ultra-hard
stainless steel.
It's really hard. We're going to show you just how hard.
It's ultra-hard, cold-rolled stainless steel alloy that we've developed.
We're going to be using the same alloy in the Starship rocket and in the Cybertruck.
We really wanted to use stainless steel as a material
so that the hardest part of the vehicle was on the outside, not the delicate paint.
Franz von Holzhausen, Tesla's chief designer, said the design of
Cybertruck was the direct result of using stainless steel.
You could only break form and form it in one direction.
You can't do compound curves with the thickness of the stainless steel that we're using.
So, it really led us to a design that was really plainer, really simplistic, and it was
also a chance to break the paradigm of what pickup trucks have been for the past 60 or 70
years.
The look of the vehicle has been the topic of controversy.
Frank Stephenson, who has designed vehicles like the BMW X5
and the updated 2000 Mini Cooper, is skeptical of its
simplistic, aggressive design.
So it's very or almost an origami style of design.
It's, uh, angular.
It's hard, it's aggressive.
It doesn't feel natural when you look at it.
So I can only figure it's a view from Mr.
Musk that he's looking at a future that isn't a very happy future.
More of a bleak look to the future.
When the Cybertruck was unveiled, it was slated to be delivered in
2021 and be reasonably priced.
There'll be three versions [Crowd Noise]
That's the price without any incentives.
That's just like the price without any incentives.
Several delays later, it is finally here with different specs
and pricing.
We saw them roll out several and hand them off to, you know, beaming fan
customers who made it down for the event.
But the analysts are trying to get their heads around.
How much can we expect the company to produce and sell this quarter?
Nobody really knows.
In the four years since its debut, the Cybertruck has had a long and arduous
road to production.
Internal documents revealed how delayed the development of the truck was in
2022.
Tesla had planned to have this vehicle start production in 2021.
That didn't happen.
They have talked about the pandemic and wars that disrupted
supply chain and more.
That's legitimate. But they were also still working out kinks with how to manufacture this.
When we're reinventing a product, sometimes we have to go through these processes
just to to prove it out.
We had this idea that making an exoskeleton vehicle could work,
and so we've been using that time to make sure that that actually is working.
By June of 2022, Elon indicated that design
was finally locked.
The design at least finally is is is locked.
We got too carried away.
Nearly a year later, Tesla built its first Cybertruck at its Austin
Gigafactory. The delays are no surprise.
The new truck represents a major deviation from traditional automotive manufacturing
processes.
This is more than 90% different, right?
So that means you really have to reinvent the process.
Actually they, did they did a great job putting this together in such a short period of time.
Say automotive industry, traditionally all the cars, no fundamental difference
except style. The overall platform is essentially the same because they all borrow or learn
from the past. So you don't have to reinvent new tooling and new assembly
sequence.
So we actually had to come up with a special ultra-strong
Tesla designed steel alloy.
This metal did not exist before.
We needed something that you could actually manufacture but have basically no corrosion.
Didn't need paint, but you can still make it in volume.
Their Vice President of Materials Engineering Charles Kuehmann works for two Elon
companies in this capacity, he works for SpaceX and Tesla, and they've collaborated on alloys
before.
Steel isn't uncommon in automotive.
It's frequently used in panels and frames as part of the vehicle's structure.
But Tesla's custom ultra-hard stainless steel could have added
some unique challenges.
Stainless steel is hard to work with.
It's much, much, much harder than all of the grades of
conventional steel, which is what the bulk of vehicles today are made out of, including Tesla's
high-volume Model 3 and Model Y.
The presses that they needed were very unique presses, massive presses, and
that is where a lot of the money would go.
And you can't use these presses forever because they start to wear out.
But automotive, using complete body panels with the stainless steel is
you know new concept.
Stainless steel and automotive has a brief history.
Ford experimented with it in a few of its cars, but never put it into production.
The DeLorean, first introduced in the mid-1970s and built from 1981
to 1982, was the first mass-produced vehicle with a stainless
steel skin.
The company went bankrupt after building fewer than 10,000 cars.
DeLorean used stainless steel.
They at least went to the trouble of using brushed metals, but the fit and
finish, they had incredible problems with that as well.
And so you would think they would either learn from that, that it's not a good material to use,
or they would find a better way to do it.
Tesla's VP of Vehicle Engineering, said that Tesla had to invent a
manufacturing process called airbending, which shapes the steel with
high air pressure without actually touching the surface.
When you bend a piece of metal, you want to maintain certain shape, and the stainless steel
tend to be more unpredictable than traditional steel.
And if you get into higher strength level that tend to be amplified.
When they produce the panel, and it will actually press it further than where it has to go, because
the steel will spring back.
Sometimes it's this much, sometimes it's that much.
So you never know.
That's where you can get these quality issues.
And the thickness which Musk has used to promote the Cybertruck as
bulletproof only further complicates things.
Typically, automotive body panels for passenger cars you're talking about in the millimeter
range. From the limited information I have, we are talking about, on the Cybertruck is
a three millimeter. That's a factor of nine in terms of stiffness.
So definitely you need a lot more force and bigger press to do it.
The flat and angular design is another issue, especially with regard
to mass production.
That form introduced tremendous complexity.
One of the criteria I teach in my class is stability.
A component has to be able to maintain design geometry
upon some disturbance.
You don't want those disturbances to introduce v ariability.
As you work on it, as you drive the vehicle.
Stainless steel is very difficult to work with.
When you cut it. All the mistakes basically show up.
When you have a flat plane like that, it's really hard to hide the
mistakes.
In late August, Elon Musk sent an email to Tesla employees
stating: "Due to the nature of Cybertruck, which is made of bright
metal with mostly straight edges, any dimensional variation shows up like a
sore thumb and emphasized that all parts for the vehicle need to be
designed and built to sub-10 micron accuracy."
Elon has even mentioned that he wants everything to be even better fit and finish than anything
else out there on the road.
If he achieves the fit and finish level quality of any normal car.
Hats off to Tesla and hats off to Elon for managing to do it.
Tesla has been using gigacasting, a manufacturing technique that creates
large, single piece alloy castings that help simplify the construction of its
cars, and the Cybertruck is likely to employ the use of it in its
construction.
The primary benefit, essentially, is a cost in parts complexity
benefit, right? You can you can cast a larger proportion of the vehicle at
one time. Less complexity, less assembly, less cost.
You can ensure uniformity for automotive industry mass
produced products.
That's very critical.
The problem is that if anything goes wrong, even in the
manufacturing process, now you have to scrap a huge piece.
There was at one point a photo of an entire parking lot full of failed gigacastings.
Um, that's part of the development process.
But still, can they get all of these new and innovative
processes up and running simultaneously in volume?
With the Cybertruck finally here, Tesla must now contend with
scaling production.
I think we'll end up with roughly a quarter million Cybertrucks a year, but I don't think
we're going to reach that output rate next year.
We probably reach it sometime in 2025.
That's my best guess.
This is scaling a type of vehicle that's never really been done before, and several other
technologies that likewise nobody else is in the industry has yet tried.
But I have every confidence that they'll get it done.
Probably six months from now.
You'll start to see volumes increase a little bit, and then a year from
now you'll be getting to something at a higher level.
It would not surprise me, however, if the Cybertruck ended up being a
seller that was more on the par of the Model X volumes.
Besides the difficulty in manufacturing, battery cell production could also be a
limiting factor.
The Cybertruck is using Tesla's new 4680 cells, and
with a 122.4kW hour battery pack, it will
need a lot of them.
The Cybertruck cell, with 10% higher energy than our Model Y cell, started production on
line two in Texas this quarter.
We convert to building 100% Cybertruck cells to simplify and focus the factory.
As we ramp all four lines in phase one, over the next three quarters.
I return to a quote from a colleague of many years.
This is a man who has built battery factories on three different continents, and he
said, when you have a new building with a new staff and you're using a
new cell chemistry in a new form, factor on brand new manufacturing
equipment that's really, really, really, really, really, really,
really hard.
The decision to rely on that cell form factor, which is still kind of cutting its teeth
for this new product, it does pose a risk, but I actually think that it will
probably ramp faster than, for example, the Cybertruck might.
With a new vehicle on the road, a lot is yet to be seen, how service
and repair will work.
Service at Tesla has been a sticking point for a number of years.
When you have a new manufacturing process, like gigacasting for the Cybertruck, that adds
another layer of complexity to the servicing piece.
The moment you scratch a vehicle like this, which you can scratch it and you can dent
it, you're going to have a hard time fixing that car.
And in that sense, it's going to be even more expensive, in terms of maintenance.
Tesla has a history of taking on challenging projects despite the risks
and delays.
The Model X when they said, hey, we're going to build this, you know,
full-size SUV, but we're also going to put Falcon wing doors on it, the Falcon
wing doors delayed or helped to delay the Model X by two years.
I think that that what this really shows is that Tesla, as a company, is still not afraid of taking
risks and not afraid of failing on occasion.
But with the first vehicles in the hands of customers and Cybertrucks
debuting in Tesla showrooms, the company appears to be making
progress.
I kind of wonder if the combination of extreme design
and an extreme and new material to make the vehicle out
of in a new factory with a new workforce no less, will prove to be
a very long term drag on the company, getting itself up to speed.
Even with all of those things stacked against it, it is going to be a
kind of iconic vehicle in the sense that nothing else looks like it.
And probably will give Tesla some cachet for sure.
This vehicle has the chance to be something really radical in a pretty
normal space, and it's incredibly functional.
It's not just the way it looks.
As functional as any of its competitors, if not more.
I think it's our best product.
I think it's the most unique thing on the road.
And finally, the future will look like the future.