At 39,000 dollar the Tesla Cybertruck will be sold at the same price as Tesla Model 3, a considerably smaller car. It is also extremely competitive price wise against traditional internal combustion engine trucks, which is something I think surprised a lot of people.
But is it actually cheap?
Electric cars will typically be more expensive that internal combustion engine cars because batteries are really expensive to make. That is the bulk of the cost of EVs. However often an EV will in the long run be cheaper because electricity is significantly cheaper than gasoline and EVs require significantly less maintenance.
The crazy thing about the Cybertruck is that it can compete with a gasoline truck right out of the store, before you even factored in total cost of ownership.
Now there has been commentators online disputing this but they tend to do an apples to oranges comparison. It is true that the cheapest Ford F-150 which Tesla is trying to compare themselves to, has a lower starting price.
However that is deceptive, the cheapest Ford F-150 starts at around 29,000 dollars, hence seemingly 10,000 dollars cheaper, but this truck can only fit 2–3 passengers. The length of the bed behind the truck is also just 5.5 feet.
The Cybertruck in contrast comes with a bed (the vault) which is 6.5 feet long and can fit 6 people comfortably. Yes, people who have taken a ride in the Cybertruck remark on how spacious it is inside. A lot of that is due to the use of a unibody exoskeleton, rather than a body-on-frame design used by Ford.
To actually compare you need to adjust the basic configuration for the 29,000 dollar Ford so it has the same size bed and can fit 6 passengers. Once you do that the F-150 ends up costing 36,300 dollars.
And we are not even done at this point because the Tesla Cybertruck comes standard with autopilot, built-in air-compressor, 110–220V outlet for electrical equipment, adjustable air suspension, built-in cover for the vault which can automatically slide up and down. And finally we have the built-in ramp. Add all these things and you quickly blow past the Cybertruck starting price.
So can we agree, this truck if Tesla delivers is an amazing value proposition.
That brings us to the original question.
How on Earth can they make it that cheap!?
Tesla’s trick is to simply avoid doing a lot of the things which add costs in a traditional factory.
Cost of shaping metal
In an automotive plant the stamping press is the most expensive equipment. It takes massive amounts of force to take a flat piece of metal and form it into a door, fender etc. The tooling is expensive because multiple stamping dies must be created for each of several stages for stamping of each part.
The Cybertruck avoids this cost because it uses flat steel sheets all over. That is not merely to avoid costs but also because the 30X cold-rolled stainless-steel Tesla uses is so hard that a normal stamping press would break if it tried to shape these steel plates.
However you can bend these steel plates in different ways. On innovative way is to use a laser cutter and cut out a part, bend and then weld the joint afterwards to make it strong. This means cheaper and simpler manufacturing than using stamping machines which requires a multi-stage process with enormous machines, requiring massive power.
Paint is Expensive
Another expensive part of car making is painting. Cars typically need paint because their mild steel exterior would otherwise rust to pieces. However stainless steel does not rust and anyway it is hard to paint.
What Tesla did is simply embrace the disadvantages of stainless steel such as it being hard to shape and paint, to create real advantages such as a strong rust resistant car body which is cheap to manufacture. Stainless steel may not be the cheapest metal but it is still considerably cheaper than aluminum.
What Tesla is good at it using their design aesthetic to their advantage. Usually a unique look cost you more money, but the simple clean interior of a Tesla is much cheaper to make.
The dashboard that looks like marble is in fact made from a paper composite. Teslarati gives some details:
These materials are then combined and baked at extremely high temperatures to create a durable and dense material that is water-resistant, environmentally sustainable, and very cost-effective.
This is much cheaper than leather and other expensive materials usually used in cars. By sticking to a single large screen they also reduce complexity and cost dramatically.
We think of touch screens and fancy, but they are not that expensive to make. A dashboard full of dials, knobs and instruments would be far more expensive to make.
How Much Cheaper is the Tooling?
This is an update to this story. Since I first wrote this piece, there has come out an interesting video from Autoline Network, where Sandy Munro , a well known advisor to manufacturing companies has done a breakdown of the tooling cost a Cybertruck compared to a Ford F-150.
I highly advice you to watch the video. These are real experts, unlike me, discussing this topic. Fortunately for me they largely confirm the analysis I have provided here. Munro concludes that at production volumes of about 50 000 Cybertrucks per year the tooling cost would be 30 million dollars. To produce the same number of F-150 style trucks in contrast would require 210 million dollars in tooling. So this is the cost of the machines needed inside the factory to crank out 50 000 trucks per year.
Why the huge difference? As I mentioned the painshop is a huge part of the cost. It will cost 150 million alone according to Munro.
Tesla has basically used clever design to make a truck which has a unique look, is cheap to make and which has superior performance and attributes.
That is what good design is all about. Bad design is an afterthought, something added to make a product the engineers already made look cool.
In this case we can see how great design thinking has added immense value at every step.