Tesla shuts down Cybertruck production for 3 days at critical time for the company
Tesla has told Cybertruck production employees not to report to work for the next three days, in another sign of demand issues for the vehicle that once touted millions of preorders.
The news was reported by Business Insider, who obtained an email telling Cybertruck production workers at Tesla’s factory in Austin, Texas that they “do not need to report to work” on “Tuesday, Wednesday, and Thursday this week (Dec. 3-5).” Workers will still be paid for their scheduled shifts.
Tesla didn’t give a comment as to why this shutdown is happening, but Business Insider said four workers told it that their schedules have been inconsistent for the last month.
Given that it is a critical time for Tesla deliveries, particularly of its flagship model, the timing is suspect.
Currently, Tesla is one of few EV producers that has sold fewer cars so far this year than it did in 2023. Despite what you may have heard, EV sales are up significantly in 2024 – but Tesla was down in the first half of this year.
The company had a good third quarter largely due to rising China sales, but is still down compared to last year.
As a result, Tesla has started pulling out a lot of stops this quarter in order to close out the year with strength. It has offered larger incentives for Tesla referral codes, lowered Model Y lease pricing, and added more flexibility to its leasing program.
And, most notably for today’s subject, just todayit lowered Cybertruck lease pricing – and this happened less than a month since the company started leasing Cybertrucks at all.
It’s another sign that Tesla isn’t seeing quite as much demand as once expected for the polarizing vehicle.
After it was first unveiled in 2019, the Cybertruck managed to tally over 250k pre-orders in less than a week, later reaching a peak of potentially 2 million reservations according to crowdsourced data.
But when the truck hit the road, things didn’t go exactly as planned. The vehicle came out late and over budget, also missing some of the specs that were originally promised. The first available “Foundation Series” models started at $100k – a far cry from the promised entry-level $40k. It’s now available at a base price of $79k– but a promised future $61k base RWD model was recently removed that from Tesla’s website.
Tesla didn’t give a comment as to why this shutdown is happening, but Business Insider said four workers told it that their schedules have been inconsistent for the last month.
Given that it is a critical time for Tesla deliveries, particularly of its flagship model, the timing is suspect.
Currently, Tesla is one of few EV producers that has sold fewer cars so far this year than it did in 2023. Despite what you may have heard, EV sales are up significantly in 2024 – but Tesla was down in the first half of this year.
The company had a good third quarter largely due to rising China sales, but is still down compared to last year.
As a result, Tesla has started pulling out a lot of stops this quarter in order to close out the year with strength. It has offered larger incentives for Tesla referral codes, lowered Model Y lease pricing, and added more flexibility to its leasing program.
And, most notably for today’s subject, just todayit lowered Cybertruck lease pricing – and this happened less than a month since the company started leasing Cybertrucks at all.
It’s another sign that Tesla isn’t seeing quite as much demand as once expected for the polarizing vehicle.
After it was first unveiled in 2019, the Cybertruck managed to tally over 250k pre-orders in less than a week, later reaching a peak of potentially 2 million reservations according to crowdsourced data.
But when the truck hit the road, things didn’t go exactly as planned. The vehicle came out late and over budget, also missing some of the specs that were originally promised. The first available “Foundation Series” models started at $100k – a far cry from the promised entry-level $40k. It’s now available at a base price of $79k– but a promised future $61k base RWD model was recently removed that from Tesla’s website.
Demand seems much lower than the sky-high expectations for the vehicle. That ~2 million vehicle backlog seems to have been depleted around October of this year, when Tesla started allowing orders without a reservation. At the time, Tesla had sold somewhere around 30,000 total Cybertrucks.
This could be the explanation for the plant shutdown. Companies will often pause production lines for a few days or weeks if production is going faster than deliveries, so as not to have a lot of inventory weighing down a balance sheet.
It’s possible that there are other reasons – a line upgrade or some sort of changes related to the recent Cybertruck inverter recall – but for the former, the end of the quarter would be a better time, and for the latter, one would think the changes would have been made closer to when the problem was found (and would likely not shut down the whole line for three days).
And if there were other reasons, that’s usually the sort of thing a company sends its PR team out to discuss, so as not to spook investors with fears of waning demand. Since Tesla hasn’t made a statement suggesting such, Occam’s razor suggests that production may be outpacing demand, and the pause is to help balance the two.
It’s possible that there are other reasons – a line upgrade or some sort of changes related to the recent Cybertruck inverter recall – but for the former, the end of the quarter would be a better time, and for the latter, one would think the changes would have been made closer to when the problem was found (and would likely not shut down the whole line for three days).
And if there were other reasons, that’s usually the sort of thing a company sends its PR team out to discuss, so as not to spook investors with fears of waning demand. Since Tesla hasn’t made a statement suggesting such, Occam’s razor suggests that production may be outpacing demand, and the pause is to help balance the two.
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bullrider_21 : Demand for Cybertruck seems much lower than the sky-high expectations for the vehicle. That ~2 million vehicle pre-order backlog seems to have been depleted around Oct of this year, when Tesla started allowing orders without a reservation. At the time, Tesla had only sold somewhere around 30,000 total Cybertrucks.
Tesla lowered Cybertruck lease pricing – and this happened less than a month since the company started leasing Cybertrucks at all. It's another sign that Tesla isn't seeing quite as much demand as once expected for the vehicle.
When the truck hit the road, things didn't go exactly as planned. The vehicle came out late and over budget, also missing some of the specs that were originally promised. The first available "Foundation Series" models started at USD100k – a far cry from the promised entry-level USD40k. It's now available at a base price of USD79k – but a promised future USD61k base RWD model was recently removed that from Tesla's website.
Macinator1171 : There’s many inaccurate statements in this article Not just one, almost everything stated here is wrong. Wow, biased much?