As Tesla’s Cybertruck continues to break the internet and supply fodder for endless memes,
I’m putting on my investor hat and explaining why the Cybertruck is pure genius and what
it means for Tesla’s bottom line.
First of all, the Cybertruk HAD to look the way it does.
There’s been endless talk and debate about the polarizing design but everyone seems to
be missing an important fact.
Its form is a manifestation of 4 key criteria Tesla had in its creation.
The Cybertruck MUST:
1.Be low cost (to produce, and therefore, to buy).
2.
Have extremely high utility & performance (more than any comparable vehicles).
3.
Be very efficient (aerodynamic, light).
4.
Be safe.
Let’s look at each of these in detail.
LOW COST
The cheaper a vehicle is to produce, the cheaper it can be sold (which expands its market)
and/or the better its margins can be.
The Cybertruck is a real, visual example of what removing complexity from a vehicle design
does.
The process of manufacturing a vehicle is extremely complicated (production hell, anyone?).
There are literally thousands of moving parts.
The Cybertruck has been engineered to be extremely efficient to manufacture.
This is VERY important.
There isn’t a single curve in sight for a reason.
The glass is flat.
The body--a stainless-steel exoskeleton--is folded from a single flat sheet of steel.
Its sturdiness eliminates the need for a vehicle frame, freeing up space and weight.
There are no stamping machines stamping body panels.
There is no paint shop.
In fact, let’s look at a video from WIRED a few years back, showing how the Model S
body is produced.
Just to remind you.
The Cybertruck body--its exoskeleton--is created from single sheet of steel which is laser
cut, scored and folded.
Done and dusted in one process.
With the Cybertruck, EVERYTHING you just saw has become a single process.
Those gigantic stamping machines and special tooling machines are really freaking expensive
and slow.
Cybertruck doesn’t need them.
The time and complexity involved in assembling all those body parts is enormous.
Cybertruck doesn’t need them.
The paint shop is extremely expensive in cost and time.
Cybertruck doesn’t need it.
How expensive are we talking?
Here’s an article about a $500 million upgrade for Ford’s Chennai factory in India which
focused on reducing cost and time of vehicles in paint shop.
The result of the half-billion-dollar investment?
The plant’s output more than DOUBLED.
Yes, JUST speeding up the paint shop more than DOUBLED output for the entire factory.
Cybertruck doesn’t even NEED a paint shop.
That greatly reduces capital costs to get the production line up and running.
More importantly, the time saved will be staggering.
No more waiting for paint to dry.
The bottom line is Cybertruck has flipped auto manufacturing on its head.
Tesla has innovated aggressively and deleted enormous amounts of complexity.
These new efficiencies will greatly reduce the COST and TIME involved in producing a
finished vehicle.
This means Tesla can [price] Cybertruck very competitively while enjoying
healthy margins, and produce large volumes of vehicles from a very small footprint within their factories.
HIGH UTILITY/PERFORMANCE.
When it boils down to it, function matters to rational buyers.
Why do rational people buy pickup trucks?
Because of their function.
Can it carry my tools?
Haul my boat?
Pull my caravan?
Store my bike?
The Cybertruck is as utilitarian as it gets.
Trucks are made to work.
Work is messy.
Paint gets chipped.
Body panels get dented.
Cybertruck eliminates both of these possibilities.
No more crying about chipped paint or a ding in the body.
How about built-in 110 and 220 volt power outlets?
No generator required.
Performance wise, Cybertruck smokes everything in its price range on every metric that matters
from towing capacity to storage.
Speaking of.
Not a square inch has been wasted.
Cybertruck has more built in storage than my first apartment did.
It’s not even close.
The design of the bed is ingenious.
The retracting cover is a game-changer for security and convenience.
The slide-out ramp to allow easy access to the bed is brilliant. I could go on and on and on.
The point here is that Tesla has thought about everything that they could possibly do within the constraints of the design and the exoskeleton,
for storage, function, features and utility. Nothing is close.
EFFICIENT.
Tesla’s powertrain and battery technology are best-in-class, there's no argument about that.
They’re currently years ahead of the competition
and the 500+ mile range Cybertruck suggests
a battery breakthrough announcement is around the corner which will push Tesla’s lead out further.
I'm sure this has something to do with the Maxwell acquisition.
Having awesomely efficient batteries is one thing, but optimising the vehicle involves
reducing weight and increasing aerodynamics too.
The “marble” looking dashboard of the Cybertruck is actually made of paper to reduce weight.
Its 3mm steel exoskeleton is heavier than the aluminum often used in bodies, but because
it is so sturdy, a traditional vehicle fame is not necessary which reduces overall weight.
At first glance, the Cybertruck may look like an aerodynamic nightmare but if we overlay
an airfoil we can see that the shape of the truck is almost perfectly matched by the shape of
the airfoil.
It’s about as aerodynamic as a vehicle can get, within reason.
What these efficiencies mean are that the energy cost per mile for the Cybertruck is
dramatically less than any gasoline or diesel powered vehicle AND it's miles ahead of any electric
competition as well.
SAFE.
Tesla currently produces the safest, second-safest, and third-safest vehicle on earth.
Let me repeat that.
THE THREE VEHICLES TESLA CURRENTLY PRODUCES: The S, 3 and X--are the 3 safest vehicles
ever tested.
Tesla takes safety seriously and despite its brutalist appearance, the Cybertruck is engineered
for safety first.
Maybe you saw the sledge-hammer demo.
The steel is strong as f**k and the angular shape of the exoskeleton creates an extremely
rigid shell.
Triangles are tough.
Steel is tough.
Cybertruck is tough.
Hopefully Tesla will reveal more safety details soon
but it's obvious even from a very quick glance that the Cybertruck, structurally, is an extremely sturdy, rigid and safe vehicle.
Let’s recap.
Tesla’s Cybertruck is function over form, with a hint of style sprinkled over the end result.
When creating the Cybertruck, Tesla started with a blank slate and 4 requirements:
It had to be:
1. Cheap.
2. High utility/performance.
3. Efficient.
4. Safe.
It is all of these things.
The Cybertruck is cheap, fast and efficient to produce (from a tiny factory footprint).
The Cybetruck is mass-market-affordable, starting at $39,900 US dollars.
The Cybertruck has MUCH more function than anything in its price range.
The Cybertruck outperforms anything in its price range.
The Cybertruck is efficient as hell, way lower cost of ownership than anything comparable.
The Cybertruck is super safe.
Oh yeah, autopilot.
So what does this mean?
No other auto maker can compete with Tesla on ALL FOUR fronts: cost, utility, efficiency & safety
unless they copy everything -- including the exoskeleton cut and folded from a single
sheet of steel.
Oh, and then they still need to somehow have equivalent battery technology OR
suffer lower margins.
My prediction?
Cybertruck’s design will become the new normal for function-based vehicles.
Consumers who want bang for their buck will no longer be willing to pay for substandard
performance or functionality.
Stubborn automakers will watch in dismay as Tesla eats their lunch. Others will sheepishly
sheepishly copy Tesla’s design to compete on cost.
Most of them will be too late.
Due to is simplicity, Tesla will be able to produce Cybertrucks VERY rapidly from a tiny
factory footprint.
Add to this the potential of Maxwell’s dry battery electrode technology which would reduce
costs and free up massive amounts of floor space in existing factories and we could
see Cybertrucks rolling off production lines at unbelievable rates.
From a Tesla investor’s point of view, this is great news.
For existing automakers, the message is clear:
Copy Cybertruck or go bankrupt.
So, what do you guys think? Do you believe that everyone is going to be forced to the Cybertruck design
because it's so efficient and cost-effective to produce that if they don't,
they simply will not be able to compete with Tesla on any meaningful metrics like cost?
Or do you think that I'm completely crazy and I should stop smoking pot?
By the way.
I'm not going to.
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this is Solving The Money Problem
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