Elon Musk, CEO of Tesla (TSLA.O), said on Wednesday that the company would have trouble increasing production of the much-anticipated Cybertruck electric pickup truck and that sales would start on November 30.
While the most valuable car in the world makes electric sedans and SUVs, it hasn’t yet entered the pickup truck market, which is very profitable and very popular in the US.
In the hot market for electric pickup trucks, the Cybertruck is likely to go up against Rivian’s (RIVN.O) R1T, Ford’s (F.N) F-150 Lightning, and General Motors’ (GM.N) Chevrolet Silverado EV.
It was important for Musk to “temper expectations” about the truck. He also said that the company might face “enormous challenges” in increasing production and making it profitable.
“We dug our own grave with Cybertruck,” he said on an earnings call after the carmaker said its margins had dropped, in part because of the truck’s production ramp-up.
The business has said it could make more than 125,000 Cybertrucks every year, and Musk said that number could go up to 250,000 by 2025. He said that more than a million people had booked the truck by putting down a small deposit. Not all analysts were sure about the sales, especially in the short run.
Seth Goldstein, an equity analyst at Morningstar, said, “I wouldn’t expect Tesla to be selling or making anywhere near 125,000 cars.” “But I think that they’re giving us an indication of the capacity they’re going to make available for the Cybertruck as production ramps up.”
At an event at its Texas factory on Nov. 30, the carmaker is likely to say how much the car will cost. The company built its first Cybertruck in July and had planned to sell the car for less than $40,000 in 2019. However, the cost of batteries has caused the price of electric vehicles to jump.
Price-wise, the R1T starts at $73,000, while the F-150 Lightning starts at around $50,000. Demand for electric vehicles (EVs) has been going down over the last year because higher interest rates make it more expensive to borrow money and make people less likely to make purchases they don’t have to.
In response, Tesla has cut the prices of its cars by a lot this year. The company wants to get more people to use its services so it can sell its high-margin self-driving software in the future.