Jon Erlichman

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It’s been four years since we got our first look at the prototype. Now, Cybertruck is set to hit the market.

It’s a hotly anticipated product launch and it’s a major milestone for Telsa.

In fact, just getting to this point required a heavy lift. The unique stainless steel design has required a unique manufacturing process. Tesla CEO Elon Musk has been quite open about the production headaches along the way.

As for Thursday’s event, we’re not expecting big numbers of vehicles to be delivered, but keep in mind with Tesla launches, it’s common to see small batches of deliveries. For example, at Tesla’s launch event for the Model 3 in 2017, the company delivered 30 vehicles, all for Tesla employees.

So while this week will be symbolically important, it’s really the road ahead that matters most. And on that front, we know there’s plenty of demand.

Remember on Tesla’s most recent earnings call. Musk talked about Cybertruck demand being “off the charts” with more than one million reservations. Some reports have suggested that number could be closer to two million.

Even with the demand, Musk has tried to temper expectations in the short term, citing the challenges in ramping up production volume.

NUMBERS TO WATCH

Currently, a group of 12 analysts polled by Bloomberg are, on average, forecasting Tesla could deliver about 78,000 Cybertrucks next year.

Musk has said that selling 250,000 vehicles a year is a reasonable goal, but not before 2025 due to the production ramp.

In the short term, given the costs associated with the rollout, Musk estimates it will be a year to 18 months before the Cybertruck can be a significant positive cash flow contributor for Tesla.

As for revenue expectations, those will also be influenced by vehicle pricing. 

Landing on a price that will be competitive with traditional pick-ups is obviously important. But to be clear, that’s not just something Tesla has to get right.

Automakers such as GM and Ford are also focused on selling their electric pick-ups and end demand for those products will also be influenced by price. 

As for who might buy a Cybertruck, Bloomberg did a survey of 3,500 Tesla owners this year who were in the market for a new vehicle in the next two years.  

More than a third said they were already considering the Cybertruck. 

Some have asked whether demand from existing Tesla customers will eat into sales of, say, the Model Y, but there were fears when the Y launched that it would cannibalize sales of the Model 3 and there wasn’t any compelling evidence of that.  

Now, another question is whether Tesla can tap into fleet sales, which represents a big chunk of the truck market. 

It’s certainly possible business owners will be reluctant to commit. But what if their employees love the Cybertruck? Could this be similar to the iPhone, which slowly made its way into the business world at the expense of products like the BlackBerry?

Meanwhile, let’s not forget we’re already seeing images of how Cybertruck may appeal to people who love the outdoors and take camping trips. If you can appeal to that market, does that help to win over more buyers?

With all that said, let’s assume we do see about 250,000 Cybertrucks sold starting in 2025.

If pricing ends up being similar to the average price for a full-size pick up in North America, that could bring in roughly US$15 billion in annual revenue.

And if you use that number within the context of current estimates for Tesla’s revenue for 2025, Cybertruck could quickly represent 10 per cent of the company’s total sales.