Cybercar and the future of Tesla

[DaveT]

People are all focused on the Cybertruck at the moment.

But let's talk about what the Cybertruck enables. Namely, a Cybercar that could be announced in a few years.

If they can make a Cybertruck that goes 250+ miles for $40k, then I'm thinking they could make a much smaller Cybertruck that goes 250+ miles for under $30k, and perhaps as low as $25k.

As many of you know, I've been a proponent that Tesla will need to release a Gen4 vehicle that competes with the Corolla/Camry market directly (not talking about cost of ownership but purely sticker price). And in order to do so, the big challenge is price.

Sure battery prices are dropping and this helps. But if Tesla can figure out a way to make the manufacturing process much cheaper for a Gen4 car, then this could enable them to produce a car that ends all ICE cars.

Enter Cybertruck.

While the world reacts over it's looks, what's most interesting is it's cost structure and design.

By going with a stainless steel exoskeleton, Tesla supposedly is able to make the car without an expensive stamping press. And further, they don't need a paint shop as well.

Just eliminating those two major parts of the manufacturing process will drastically reduce costs.

As transport goes fully autonomous, the idea of transport will evolve into one where you are no longer "driving a car" but rather the "car is driving you." Thus, the priorities of what's important in a car changes.

If a car is driving you, some/many might want the safest car around. And that is where the Cybercar will excel.

The Cybercar will borrow a lot from Cybertruck in terms of it's dent-proof exoskeleton and bulletproof glass. Basically, it will be the safest passenger car ever and a true armored personal carrier vehicle. This is something no other manufacturer is even thinking about at this price point (under $30k).

Tesla can also eventually release a regular-looking Gen4 car (just like it can release a regular looking pickup truck too), but that could actually be a couple years after the Gen4 Cybercar since the Cybercar is what will enable the cheapest manufacturing process possible. And as costs get driven down with volume, Tesla will also be able to release a slightly higher priced Gen4 car (under $30, maybe under $25k).

So, while most everyone is focused on the design of the Cybertruck, as an investor I'm most excited at the developments Tesla has made with reducing the cost of manufacturing and the ability to make a super heavy and super large truck that goes over 300+ miles for under $50k. This is the major achievement. Also, not to mention a 500+ mile range super large and heavy truck that goes 2.9s 0-60mph all for under $70k.

Tesla's Cybertruck announcement was a twofold announcement: 1) here's the Cybertruck, and 2) we've made major advances with cost/range that will extend to our entire vehicle lineup going forward.

Arguably, #2 is a much larger and more significant announcement.

As long as Tesla dominates #2 (cost/efficiency/etc), then they will be able to release new vehicles that other manufacturers can't beat.

For example, Elon's mentioned previously that if people don't like/buy the Cybertruck they can always release a more regular-looking pickup truck. This highlights that the more important thing is the platform for the pickup truck (vs the design).

In other words, the pickup truck platform will be extendable so that Tesla will be able to make a regular pickup truck using the same platform (powertrain) and maybe even some or most of the interior as well.

Tesla can also use the powertrain for the pickup truck to maybe a Sprinter-like delivery van. Imagine a Sprinter-like delivery van that gets 500 mile range, all for the same or similar price as a Mercedes Sprinter van. This is the looming death of the MB Sprinter van. It's just a matter of time.

Also, it's possible that Tesla can leverage the powertrain for the pickup truck and release an extra large SUV. If they can get the price right, people would be all over this.

Starting at the upcoming Investor Battery Day, we'll see Tesla's long-term battery strategy. It's probable (almost a sure thing in my opinion) that Tesla starts to make their own cells using Maxwell technology and other improvements. And I believe it's upon this foundation that Tesla is predicting/planning to deliver the 500+ mile pickup truck and the 500 miles Semi truck.

It's also this next generation cell that will enable a 500+ Model S/X. And likely a 400-500 miles Model 3/Y.

But with Tesla getting into cell production, there are additional risks that Tesla will take on. Making cells will likely be a learning process, and sometimes new technologies don't always work out the way we think they will. It's possible Tesla doesn't realize the full cost or range improvements they are expecting. And it's possible scaling their own cells will be another production ramp hell.

But Elon knows what he must do. He will push the envelope and do whatever it takes to push the transition to sustainable transport and energy.

And the Cybertruck reveal was just that. Elon pushing the envelope. And showing us what's ahead for Tesla's future lineup of vehicles.

 

[sparcs]

that is interesting. A cyberhatchback or a cybercrossover that slots below the Model Y. Maybe driving the price to $25k.

Make that your low cost robotaxi with no steering wheel that is bulletproof and basically lives on for practically forever.

 

[mickificki]

Always enjoy reading your takes Dave, thanks for sharing.

People are all focused on the Cybertruck at the moment.

But let's talk about what the Cybertruck enables. Namely, a Cybercar that could be announced in a few years.

If they can make a Cybertruck that goes 250+ miles for $40k, then I'm thinking they could make a much smaller Cybertruck that goes 250+ miles for under $30k, and perhaps as low as $25k.

As many of you know, I've been a proponent that Tesla will need to release a Gen4 vehicle that competes with the Corolla/Camry market directly (not talking about cost of ownership but purely sticker price). And in order to do so, the big challenge is price.

Sure battery prices are dropping and this helps. But if Tesla can figure out a way to make the manufacturing process much cheaper for a Gen4 car, then this could enable them to produce a car that ends all ICE cars.

Enter Cybertruck.

While the world reacts over it's looks, what's most interesting is it's cost structure and design.

By going with a stainless steel exoskeleton, Tesla supposedly is able to make the car without an expensive stamping press. And further, they don't need a paint shop as well.

Just eliminating those two major parts of the manufacturing process will drastically reduce costs.

As transport goes fully autonomous, the idea of transport will evolve into one where you are no longer "driving a car" but rather the "car is driving you." Thus, the priorities of what's important in a car changes.

If a car is driving you, some/many might want the safest car around. And that is where the Cybercar will excel.

The Cybercar will borrow a lot from Cybertruck in terms of it's dent-proof exoskeleton and bulletproof glass. Basically, it will be the safest passenger car ever and a true armored personal carrier vehicle. This is something no other manufacturer is even thinking about at this price point (under $30k).

Tesla can also eventually release a regular-looking Gen4 car (just like it can release a regular looking pickup truck too), but that could actually be a couple years after the Gen4 Cybercar since the Cybercar is what will enable the cheapest manufacturing process possible. And as costs get driven down with volume, Tesla will also be able to release a slightly higher priced Gen4 car (under $30, maybe under $25k).

So, while most everyone is focused on the design of the Cybertruck, as an investor I'm most excited at the developments Tesla has made with reducing the cost of manufacturing and the ability to make a super heavy and super large truck that goes over 300+ miles for under $50k. This is the major achievement. Also, not to mention a 500+ mile range super large and heavy truck that goes 2.9s 0-60mph all for under $70k.

Tesla's Cybertruck announcement was a twofold announcement: 1) here's the Cybertruck, and 2) we've made major advances with cost/range that will extend to our entire vehicle lineup going forward.

Arguably, #2 is a much larger and more significant announcement.

As long as Tesla dominates #2 (cost/efficiency/etc), then they will be able to release new vehicles that other manufacturers can't beat.

For example, Elon's mentioned previously that if people don't like/buy the Cybertruck they can always release a more regular-looking pickup truck. This highlights that the more important thing is the platform for the pickup truck (vs the design).

In other words, the pickup truck platform will be extendable so that Tesla will be able to make a regular pickup truck using the same platform (powertrain) and maybe even some or most of the interior as well.

Tesla can also use the powertrain for the pickup truck to maybe a Sprinter-like delivery van. Imagine a Sprinter-like delivery van that gets 500 mile range, all for the same or similar price as a Mercedes Sprinter van. This is the looming death of the MB Sprinter van. It's just a matter of time.

Also, it's possible that Tesla can leverage the powertrain for the pickup truck and release an extra large SUV. If they can get the price right, people would be all over this.

Starting at the upcoming Investor Battery Day, we'll see Tesla's long-term battery strategy. It's probable (almost a sure thing in my opinion) that Tesla starts to make their own cells using Maxwell technology and other improvements. And I believe it's upon this foundation that Tesla is predicting/planning to deliver the 500+ mile pickup truck and the 500 miles Semi truck.

It's also this next generation cell that will enable a 500+ Model S/X. And likely a 400-500 miles Model 3/Y.

But with Tesla getting into cell production, there are additional risks that Tesla will take on. Making cells will likely be a learning process, and sometimes new technologies don't always work out the way we think they will. It's possible Tesla doesn't realize the full cost or range improvements they are expecting. And it's possible scaling their own cells will be another production ramp hell.

But Elon knows what he must do. He will push the envelope and do whatever it takes to push the transition to sustainable transport and energy.

And the Cybertruck reveal was just that. Elon pushing the envelope. And showing us what's ahead for Tesla's future lineup of vehicles.

 

[JBee]

People are all focused on the Cybertruck at the moment.

Tesla's Cybertruck announcement was a twofold announcement: 1) here's the Cybertruck, and 2) we've made major advances with cost/range that will extend to our entire vehicle lineup going forward.

Arguably, #2 is a much larger and more significant announcement.

Completely agree with that statement DaveT. Just maybe not so much for smaller vehicles.

There is one thing that is inherent in the Cybertruck design that needs to be achieved with any other potential "cybercar" model, and that is manufacturing and structural efficiencies. Typically this is defined by engineering processes and design (like straight panels = no $m press), further the classic marketing approach of vehicle length = cost (e.g. with Mercs you can pay up to $15k per foot of extra car) is a somewhat muted variable, the more the design becomes efficient. In the realm of EM design, efficiency is achieved by reducing parts to a minimum, but at some point there are not many parts that you can take out of the overall system, or customize, without loosing functionality, or the balance of value for money.

In the case of a small car the internal volume, or amount of material used and derived costs, it comes down to a complex compromise of various systems used in the production of the vehicle, as well as the systems in the resulting vehicle. All these are dependent on material and labour costs to engineer it, hence the changes to unconventional materials need also to be considered as a developing market, and somehow mass produced to drive down costs to make it viable (as with the batteries). It's likely the vehicle structure material cost could become insignificant enough (Stainless Steel is predominately iron, which is 35% of the planet), in comparison to drivetrain and battery costs, so that a smaller vehicle becomes nonviable. This means EV's are not infinitely scale-able, and typically transportation systems increase efficiency with size for a given load (trucks, trains, Starship etc).

Further vehicle range is predominately dictated by aerodynamics, by the vehicle frontal area (skin resistance is minimal at these velocities, altitude is mostly recoverable), which doesn't change as much as one would think between vehicle types, meaning the battery still needs to be of significant size. In fact most frontal size increases can be combated with better aerodynamic packaging, which tend to get easier the longer the vehicle gets in relation to the frontal area. (like the shape of a falling water droplet) So the longer the vehicle the more the load capability without much additional cost in the drivetrain and battery, ie increased value for money. The point is that a smaller car might not achieve the same performance/size to value ratio as the CT in it's current form, due to it's inferior packaging, and as such the CT cost is not a accurate indication of cost improvement of a future smaller model. Using the next generation batteries will improve small car value, but overall all these improvements won't be to the same degree as with the CT, S or X.

I think using Stainless Steel is a masterstroke, in that the CT will actually help EM achieve his Starship aspirations as well, by reducing the cost of the SS by making the SS product mass produced, effectively displacing much of the steel industry that conventional vehicles use (another market disruption). At the same time making vehicles that can last 20+ years means that the other goal of EM to revolutionize the transportation industry through FSD, really suggests he is trying to generate vehicles for shared use, over long periods of time, rather than for private ownership and 5 year cycle consumers. EM said he wants to stop selling Model 3s, to the point their leases are limited to 3 years. I'm not sure where a more "affordable" model fits in here, where a FSD ride can be hailed with NO capital cost to the customer whatsoever. The economics, and therefore also the environmental impacts of such a change in the transport market are very significant IMHO, and shouldn't be neglected in any portfolio.

Therefore, one could say, from an global investment perspective, Tesla's goals for the overall reduction of materialistic consumption along with monetary transactions, through the reduction of cost of mobility by vertically integrating supply with demand, for the sake of environmental sustainability, is inherently at odds with the objective of capitalist gain ;-P This I hope, will put the environment back on the balance sheets where it belongs.

 

[Rowan256]

Just thinking about it makes me realise how much more batteries they will have to make compared to right now within like 3 years.
Also note that they are planning to make the cheaper versions first and later the faster and more expensive ones according to Electrek ( "The two less expensive versions, which are going to start at $49,900 and $69,900, are coming in “late 2021,” while two more expensive versions with more motors and bigger battery packs are going to be available in “late 2022.” ").
This while they did the opposite with the model 3 for example.

 

[FreqFlyer]

The simplified shapes may finally enable the "machine building the machine" concept. If you are going to sell a sub $25K car with straight lines like the CT, Tesla better find a way to add color to the Stainless Steel. Young buyer are going to want some personalizing options.

 

[Singer3000]

Wonderful to see you posting again Dave.

Upon reflection, I agree that this reveal is not about making a polarising niche product but a crucial part of the roadmap to get to the 20 million units per year Elon talked about on the last call. The "last product release for a while" tweet is vague enough that it doesn't rule out an unveil of a cyber car at around the time the truck hits the streets, or even earlier.

Next up Battery / Powertrain Investor Day. Beyond that, it will be fascinating as 2020 unfolds to get a sense of how quickly/cheaply they think they are able to build out plant for the exoskeleton design. Foremost in my mind is whether they have already figured out mass production for the steel laser cutting/folding or if this is yet to come. Right now I'm expecting ramp of in-house cells to be a "sleeping on the factory floor" event, unless there's a further acquisition (Pana US perhaps). Hopefully the steel work proves easier!

 

[silverelan]

If the Cybertruck is the proof of concept for an evetual durable but unattractive robotaxi, then we already know what it's going to look like. Johnny Cab from Total Recall.
Google Image Result for https://www.hemmings.com/blog/wp-content/uploads//2010/02/totalrecallcars_14_1000.jpg

 

[JRod0802]

Sounds like Elon agrees with you, Dave.

Elon Musk on Twitter

 

[jhm]

IIRC, Musk claimed that engineering the manufacturing process is 100X the effort of designing the vehicle. I suspect that Musk has been challenging his people to cut that ten-fold or better. Is it possible that with Cybertruck the manufacturing engineering work is not just 10X to 20X the design work?

If my hunch is correct, this opens Tesla up to rapid development of new models. All sorts of niche products become possible to bring to market. In particular a vehicle with say 100k annual sales potential could reach an economy of scale that might otherwise take 500k to 1M in annual production to achieve.

Before jumping into a Cybercar, Tesla could redesign the Semi as a CyberSemi. Smaller scale production would not be so much a problem. But there would be other advantages. Most importantly, it would be awesome to design a semi rugged enough for 5M miles or more, even if the batteries are swapped every million miles or so and especially if it is autonomous with maximal daily use.

 

[JBee]

No new realeases for a while is the word. CT design and manufacturing needs to be proven first. A short bed might be in the cards, but thats about it for now.

The truss structure (triangular exo-frame) doesn't scale well, unless you want a two seater. EM said the SS will break a press, so this stuff can only be folded, meaning the smaller the car the harder the aerodynamics will be, so the less effective range for the battery used.

 

[gluu]

Do we think Cybertruck/Cyber* will be the first alien dreadnought 1.0 factory? Seems like they could go for full automation with this design.

 

[SmartElectric]

Perspective : I drive one of the smallest cars available for sale, a Smart ED, which weighs less than the cargo capacity of the CYBRTRK.

While I would strongly advocate for Tesla to build a truly "right sized" vehicle for commuting, I think that is unlikely, and here's my points.


The Smart has plastic body panels that don't rust, are resistant to dents and cheap to mold and manufacture.
The Smart has a metal security cage (aka Tridion Safety Cell) that forms the uni-body structure of the vehicle, everything else is bolted to it.
The Smart has a tiny 17.6 kWh NMC lithium ion battery, which obviously requires a fraction of the lithium, cobalt, nickel and manganese compared to a larger battery.
The Smart has convenience features like motorized windows, locks, anti-lock brakes, electronic stability control, cross wind assist tech.

The amount of energy + materials from raw materials to production, manufacture and running are vastly less than any other car over a 100,000 km and 8 year ownership period.

The MSRP of the Smart ED was $30K CAD, the MSRP of the Model 3 SR+ is $50K CAD, the base truck is $60K CAD.

The Tesla's are vastly more capable vehicles, the Smart is way more environmentally advantageous for my small commute needs.
I can afford to buy a second Tesla (my wife has a Model S), but I chose to drive the Smart ED for the "it's all I need" reason primarily.

AND YET, while I would love Tesla to make a Smart ED like vehicle, Smart only sold a few hundred in Canada, the market isn't there.

Whereas Tesla sells tens of thousands of vehicles in Canada, and those owners are unlikely to have more than 2 people in the car and average 100 km of driving per day the majority of the time.

It matters not how efficient the car is to produce, if people don't buy it, don't make it.

 

[strangecosmos2]

I would love to see a Cybercar and CyberSUV eventually. They wouldn't have to necessarily replace the Model 3 and the Model Y or the upcoming smaller, cheaper "Model 2" and "Model Z". The Cyber line of vehicles could complement a more traditional-looking line of vehicles in the Model 3 lineage.

I think as Tesla makes progress on Navigate on Autopilot, Summon, and urban driving assistance features, the futuristic look of the Cybertruck will feel increasingly fitting.

 

[JBee]

Perspective :

It matters not how efficient the car is to produce, if people don't buy it, don't make it.

Exactly. And this is were the value for money argument will persuade people to buy the best of their budget in consideration of their needs. The problem is that most people don't have a firm handle of their own needs and drive a 1-2 passenger vehicle to do what they need to do on a daily basis, and need to compromise for the times they might need to drive more people at the same time, and therefore go for something that covers all their perceived needs. Provided it's good value for money. What the ROI on that is most people don't know, and many don't even want to know, although it is becoming more of a topic amougst non-fleet managers now.

Similarly, just take the cost comparison between the model 3 and the CT. Which one would most US buyers purchase seeing both are nearly the same price? Just alone the air suspension makes the CT more valuable. The size is also another customer driven need, and is shown by the market share of trucks in comparison to other smaller models. Most people would like a larger car, but can't afford it. Likewise many people would like a EV but can't afford it. It's a balancing act.

Most people only have the capacity to do what they can afford, not what they want.

But the affordability argument goes out the window as soon as FSD is activated, because then nearly anyone can afford to drive in a EV, and can swap EV's as required for the given task. At that point I'd expect to see the manufacturing of more tandem two seaters and buses. A two seater for those that prefer to be more private on their trip, and buses for those don't mind sharing to save a dollar....and eVTOL for anything longer distance.

At some point transportation will become a utility, not a privilege.

This raises another question, in the absence of fossil derived road pavement, what are we going to drive on in the future if fossil fuels is no longer used to build 95% of our road surfaces?

 

[doghousePVD]

The simplified shapes may finally enable the "machine building the machine" concept. If you are going to sell a sub $25K car with straight lines like the CT, Tesla better find a way to add color to the Stainless Steel. Young buyer are going to want some personalizing options.

As Henry Ford said, "You can have it any color you want, so long as it's black."

I think the answer will be aftermarket wraps to keep manufacturing cost down.

 

[shiakas]

People are all focused on the Cybertruck at the moment.

But let's talk about what the Cybertruck enables. Namely, a Cybercar that could be announced in a few years.

If they can make a Cybertruck that goes 250+ miles for $40k, then I'm thinking they could make a much smaller Cybertruck that goes 250+ miles for under $30k, and perhaps as low as $25k.

As many of you know, I've been a proponent that Tesla will need to release a Gen4 vehicle that competes with the Corolla/Camry market directly (not talking about cost of ownership but purely sticker price). And in order to do so, the big challenge is price.

Sure battery prices are dropping and this helps. But if Tesla can figure out a way to make the manufacturing process much cheaper for a Gen4 car, then this could enable them to produce a car that ends all ICE cars.

Enter Cybertruck.

While the world reacts over it's looks, what's most interesting is it's cost structure and design.

By going with a stainless steel exoskeleton, Tesla supposedly is able to make the car without an expensive stamping press. And further, they don't need a paint shop as well.

Just eliminating those two major parts of the manufacturing process will drastically reduce costs.

As transport goes fully autonomous, the idea of transport will evolve into one where you are no longer "driving a car" but rather the "car is driving you." Thus, the priorities of what's important in a car changes.

If a car is driving you, some/many might want the safest car around. And that is where the Cybercar will excel.

The Cybercar will borrow a lot from Cybertruck in terms of it's dent-proof exoskeleton and bulletproof glass. Basically, it will be the safest passenger car ever and a true armored personal carrier vehicle. This is something no other manufacturer is even thinking about at this price point (under $30k).

Tesla can also eventually release a regular-looking Gen4 car (just like it can release a regular looking pickup truck too), but that could actually be a couple years after the Gen4 Cybercar since the Cybercar is what will enable the cheapest manufacturing process possible. And as costs get driven down with volume, Tesla will also be able to release a slightly higher priced Gen4 car (under $30, maybe under $25k).

So, while most everyone is focused on the design of the Cybertruck, as an investor I'm most excited at the developments Tesla has made with reducing the cost of manufacturing and the ability to make a super heavy and super large truck that goes over 300+ miles for under $50k. This is the major achievement. Also, not to mention a 500+ mile range super large and heavy truck that goes 2.9s 0-60mph all for under $70k.

Tesla's Cybertruck announcement was a twofold announcement: 1) here's the Cybertruck, and 2) we've made major advances with cost/range that will extend to our entire vehicle lineup going forward.

Arguably, #2 is a much larger and more significant announcement.

As long as Tesla dominates #2 (cost/efficiency/etc), then they will be able to release new vehicles that other manufacturers can't beat.

For example, Elon's mentioned previously that if people don't like/buy the Cybertruck they can always release a more regular-looking pickup truck. This highlights that the more important thing is the platform for the pickup truck (vs the design).

In other words, the pickup truck platform will be extendable so that Tesla will be able to make a regular pickup truck using the same platform (powertrain) and maybe even some or most of the interior as well.

Tesla can also use the powertrain for the pickup truck to maybe a Sprinter-like delivery van. Imagine a Sprinter-like delivery van that gets 500 mile range, all for the same or similar price as a Mercedes Sprinter van. This is the looming death of the MB Sprinter van. It's just a matter of time.

Also, it's possible that Tesla can leverage the powertrain for the pickup truck and release an extra large SUV. If they can get the price right, people would be all over this.

Starting at the upcoming Investor Battery Day, we'll see Tesla's long-term battery strategy. It's probable (almost a sure thing in my opinion) that Tesla starts to make their own cells using Maxwell technology and other improvements. And I believe it's upon this foundation that Tesla is predicting/planning to deliver the 500+ mile pickup truck and the 500 miles Semi truck.

It's also this next generation cell that will enable a 500+ Model S/X. And likely a 400-500 miles Model 3/Y.

But with Tesla getting into cell production, there are additional risks that Tesla will take on. Making cells will likely be a learning process, and sometimes new technologies don't always work out the way we think they will. It's possible Tesla doesn't realize the full cost or range improvements they are expecting. And it's possible scaling their own cells will be another production ramp hell.

But Elon knows what he must do. He will push the envelope and do whatever it takes to push the transition to sustainable transport and energy.

And the Cybertruck reveal was just that. Elon pushing the envelope. And showing us what's ahead for Tesla's future lineup of vehicles.

I was thinking the exact same idea described in this post. Also made a rendering of it:

 

[heltok]

I was thinking the exact same idea described in this post. Also made a rendering of it:

View attachment 481941

I would buy this one, would be perfect for my needs!

 

[JBee]

Won't be very aero so will have less range than a CT with the same battery.

 

[jeewee3000]

Am I the only one that would rather pay a bit more for a vehicle that does have round edges and nice lines? (Model S, 3 spring to mind)

If the future of (Tesla) cars is like the Cybertruck, It'd be pretty depressing. Just a personal opinion. I know many like the look. But an Aston Martin DB5, DBS, DB9 or simply Tesla Model S and 3 are IMO way prettier than the LEGO-ish Batmobilish Cybertruck.

de gustibus et coloribus non est disputandum