Tesla (NASDAQ:TSLA) has ceased taking orders for its least expensive Cybertruck variant, the rear-wheel drive (RWD) model priced around $61,000, as it faces an accumulation of more costly versions in inventory. The move has raised eyebrows given the substantial number of preorders and the company’s goal to ramp up production.
Currently, the least costly Cybertruck available is the all-wheel drive (AWD) version, priced at $99,990, which offers a range of 318 miles. The higher-end tri-motor ‘Cyberbeast’ model is available for $119,900, with an estimated delivery starting in October. In contrast, the AWD Foundation Series model can be ordered with immediate delivery in August or September.
Demand and Supply Dynamics
Despite having around 1 million preorders, according to Elon Musk, the halt on the RWD model might signal underlying demand issues. Tesla’s Cybertruck has achieved notable sales, with 8,755 units delivered in Q2, outpacing competitors like Ford’s F-150 Lightning and Rivian’s R1T. However, the Cybertruck’s volume remains relatively modest compared to Tesla’s total global deliveries of 1.8 million vehicles last year.
Sam Abuelsamid, a principal analyst at Guidehouse Insights, suggests that Tesla’s pattern of announcing low-cost variants followed by delays or limited availability is consistent with past behavior. He speculates that the high price and reduced capability of the current Cybertruck models might be leading to a lower-than-expected conversion rate of preorders to actual sales.
Inventory and Market Response
Reports indicate that unsold Foundation Series Cybertrucks may be accumulating in storage, exacerbating supply issues. The presence of these vehicles in storage suggests that Tesla may be struggling to move higher-priced models before potentially reintroducing lower-cost options. The delay in deliveries for the RWD model, projected for 2025, might see it reappear on Tesla’s order page in the future.
Abuelsamid estimates that current sales of the Cybertruck may stabilize around figures similar to Tesla’s higher-end Model S and Model X, which sold approximately 40,000 units in the U.S. last year. This would be significantly less than the 200,000-unit annual production run rate Tesla targets for the Cybertruck.
Future Outlook
Tesla’s decision to halt orders for the RWD Cybertruck is unlikely to be permanent. The company may revisit the model once inventory levels are managed and demand for the higher-priced versions stabilizes.
Featured Image: Freepik