Shocking decision from Elon Musk: Tesla Cybertruck, which turned into a fiasco, is being unplugged

The huge electric pick-up category, once marketed by automakers as the "future of the industry", is about to suffer its highest-profile loss. Tesla is preparing to stop production of the Cybertruck model, which has been on the agenda for years with its controversial design, next year.

Tesla CEO Elon Musk, in his statement on social media last Saturday, said that production would be accelerated only to meet "accumulated orders" at the factory in Austin, Texas; then announced that the assembly line would be completely dismantled around June or July. Musk stated that this finalization step will allow the company to allocate more production capacity to the "Cybercab" robotaxi model, which has not yet started commercial sales.

'GHOST PLANE' DESIGN COULD NOT SAVE SALES

The stainless steel, angular Cybertruck, which was once described by MotorTrend magazine as having "a design theme that is a cross between a stealth bomber and a refrigerator", did not attract the expected attention in the market.

According to estimates by research company Motor Intelligence, sales of the vehicle decreased by 28% in the period until September this year, falling to approximately 11,600 units.

This sales rate is far from the annual target of 250 thousand units that Musk once predicted.

Even Musk's other major company, SpaceX, was forced to support sales by purchasing a Cybertruck worth $131 million from Tesla last year at list price, according to federal regulatory agency filings.

THE END OF THE ROAD APPEARS FOR COMPETITORS ALSO

The massive electric pick-up market has also been a bumpy road for Tesla's rivals.

Even the Cybertruck's relatively weak deliveries have outpaced the electric pick-up sales of the market's other giants, General Motors (GM) and Ford Motor.

However, executives of both companies had high hopes that the battery-powered versions of the full-size pick-ups, their biggest source of revenue, would be a big hit.

Detroit-based auto giants turned to electric pickups earlier this decade in an effort to fend off new players like Tesla and Rivian.

Stellantis, the maker of GM, Ford and Ram, has built a fiercely loyal customer base by offering ever-increasing horsepower and towing capacity for decades.

'MORE MONEY FOR LESS FUNCTIONALITY'

Companies have failed to adapt this successful formula to electric (EV) pickup trucks, according to Karl Brauer, executive analyst at vehicle research site iSeeCars.com.

Brauer summarizes the main reasons for failure as follows:

"First, the vehicles are very expensive due to huge battery costs. For example, GM's Chevrolet Silverado EV model has a starting price of around $62,000. Second, these pickup trucks struggle to perform the demanding tasks that internal combustion pick-up owners are accustomed to, such as towing horse trailers or hauling heavy equipment. As a result, the consumer is forced to pay more for a less functional vehicle."

RETURNING TO HYBRID TECHNOLOGY

Ford CEO Jim Farley also acknowledged this difficult economic reality in an earnings call last year, saying: He explained why they would stop the production of "Lightning", the electric version of the popular F-150 model, which was a "hit" for a while but demand cooled.

"The larger the vehicle, the larger the battery. This puts serious pressure on profit margins, because customers do not want to pay extra premium for it," Farley said. He used the following expressions.

Ford has now turned its route to a much smaller electric pick-up model. The company is expected to launch its new vehicle, called "Fathom", late next year with a very competitive starting price of approximately 28 thousand dollars.