Ross Gerber, CEO of Gerber Kawasaki, updates you on the company’s latest results in Claman Countdown.
Elon Musk, CEO of Tesla said in the company’s earnings release on Wednesday that he wanted to “temper expectations” for Cybertruck, although he believes it is “our best product ever” because it will take time to reach mass production and is futuristic Electric pickup will make a positive contribution to the company’s cash flow.
The The production of Tesla Cybertruck has been delayed multiple times since it was first announced in 2019. Last year, Musk said supply chain issues sourcing components were a factor in pushing back production to 2023. Musk said the company is aiming to produce about 250,000 Cybertrucks every year – although it may take until 2025 to reach that volume.
“I know people are excited about the Cybertruck, I am too. I drove the car, it’s an amazing product. “I want to emphasize that there will be enormous challenges in achieving mass production with the Cybertruck and then making a Cybertruck that is cash flow positive,” Musk said.
“That’s just normal, when you have a product with a lot of new technology or for a new vehicle program, but especially for a product as different and advanced as the Cybertruck, you’re going to have problems depending on how many new things you have “We’re trying to solve them on a large scale,” he explained. “I just want to emphasize that while I think this is potentially our best product, in fact I believe it is our best product ever. However, it will take tremendous work to achieve mass production and generate positive cash flow at a price that people expect they can afford.”
ELON MUSK’S TESLA CYBERTRUCK: 5 QUICK FACTS
Tesla CEO Elon Musk said he wanted to “temper expectations” for the Cybertruck, saying it would take time to reach mass production and become cash flow positive. (Nic Coury/Bloomberg via Getty Images / Getty Images)
Musk said the Cybertruck was his first Series model The product, which rolls off the production line at Tesla’s Gigafactory in Texas this July, highlights the difficulty of moving from the prototype phase to large-scale production while achieving positive cash flow.
“Prototypes are easy, production is difficult. Going from prototype to production is 10,000% harder to get to series production than making the prototype in the first place. And then it’s even harder to achieve positive cash flow. That.” That’s why there weren’t any New car startups who have been successful for a hundred years, apart from Tesla,” he explained.
ELON MUSK SHARES TESLA’S CYBERTRUCK TEST
Tesla CEO Elon Musk said the company has 1 million reservations for Cybertrucks and aims to book about 250,000 per year by 2025. (Photo by SUZANNE CORDEIRO/AFP via Getty Images / Getty Images)
Musk said he expects it will take about a year to a year and a half for Cybertruck to begin contributing positive cash flow in the company’s balance sheet, but one million Cybertruck reservations have been made so far.
“I just want to temper expectations for Cybertruck. It’s a great product, but financially it’s going to take, I don’t know, a year to 18 months to make a significant positive cash flow contribution,” Musk said. “I wish there was a way to do it differently, but that’s my best guess. The demand is overwhelming, we have over a million people who have reserved the car. So it’s not a demand issue, but we have to make it, and we have to make it at a price that people can afford. Insanely difficult things.”
Tesla CEO Elon Musk reacts in front of the newly unveiled all-electric, battery-powered Tesla Cybertruck prototype after a demonstration of supposedly unbreakable windows did not go as planned on November 21, 2019. (Photo by FREDERIC J. BROWN/AFP via Getty Images / Getty Images)
GET FOX BUSINESS ON THE GO by CLICKING HERE
A price for the Cybertruck has yet to be announced and Tesla has not provided any specific details about the electric vehicle’s specifications or an official date for the start of initial deliveries to dealers. When Tesla first announced it in 2019 and potential buyers could reserve it for $100, the estimated starting price was under $40,000. Since then, changes have been made to the design, fueling speculation that it could cost more than originally thought.
Tesla shares fell more than 4% in after-hours trading at 8:00 p.m. Eastern time on Wednesday following the earnings announcement. The company’s shares were down 4.78% for the day.
FOX Business’ Joe Toppe contributed to this report.
Source : www.foxbusiness.com