When Tesla unveiled its vision for an electric
truck in November 2019, it shocked the world. Like 100 years, trucks have been basically the
same. We want to try something different. So I present to you the Cybertruck. Elon Musk has been hyping the Cybertruck as
Tesla's best product ever, and four years later, the first deliveries
have begun. It's very rare that a product comes along that is
seemingly impossible. That people said was impossible, that
experts said was impossible. And this is one of those times. But getting the truck to market has been
challenging. Musk has repeatedly emphasized how difficult
building it has been. The Cybertruck, I've driven the car. It's an amazing product. I do want to emphasize that there will be
enormous challenges in reaching volume production, and then in making the Cybertruck cash flow
positive. We dug our own grave with Cybertruck. You're building a stainless steel vehicle, which
is really been done hardly ever in the history of the auto industry, and that alone
was going to make it challenging. Stainless steel is tough to tool for. It's tough to work with, and this is in some ways
a really giant experiment, which I think the whole industry is watching with some
interest. I think they've signed up for another production
hell. We're able to make the the skin out of thick,
ultra-hard stainless steel. It's really hard. We're going to show you just
how hard. It's ultra-hard, cold-rolled stainless steel
alloy that we've developed. We're going to be using the same alloy in the
Starship rocket and in the Cybertruck. We really wanted to use stainless steel as a
material so that the hardest part of the vehicle was on
the outside, not the delicate paint. Franz von Holzhausen, Tesla's chief designer, said
the design of Cybertruck was the direct result of using
stainless steel. You could only break form and form it in one
direction. You can't do compound curves with the thickness
of the stainless steel that we're using. So, it really led us to a design that was really
plainer, really simplistic, and it was also a chance to break the paradigm of what
pickup trucks have been for the past 60 or 70 years. The look of the vehicle has been the topic of
controversy. Frank Stephenson, who has designed vehicles like
the BMW X5 and the updated 2000 Mini Cooper, is skeptical of
its simplistic, aggressive design. So it's very or almost an origami style of design. It's, uh, angular. It's hard, it's aggressive. It doesn't feel natural when you look at it. So I can only figure it's a view from Mr. Musk that he's looking at a future that isn't a
very happy future. More of a bleak look to the future. When the Cybertruck was unveiled, it was slated to
be delivered in 2021 and be reasonably priced. There'll be three versions [Crowd Noise] That's the price without any incentives. That's just like the price without any
incentives. Several delays later, it is finally here with
different specs and pricing. We saw them roll out several and hand them off to,
you know, beaming fan customers who made it down for the event. But the analysts are trying to get their heads
around. How much can we expect the company to produce and
sell this quarter? Nobody really knows. In the four years since its debut, the Cybertruck
has had a long and arduous road to production. Internal documents revealed how delayed the
development of the truck was in 2022. Tesla had planned to have this vehicle start
production in 2021. That didn't happen. They have talked about the pandemic and wars that
disrupted supply chain and more. That's legitimate. But they were also still
working out kinks with how to manufacture this. When we're reinventing a product, sometimes we
have to go through these processes just to to prove it out. We had this idea that making an exoskeleton
vehicle could work, and so we've been using that time to make sure
that that actually is working. By June of 2022, Elon indicated that design was finally locked. The design at least finally is is is locked. We got too carried away. Nearly a year later, Tesla built its first
Cybertruck at its Austin Gigafactory. The delays are no surprise. The new truck represents a major deviation from
traditional automotive manufacturing processes. This is more than 90% different, right? So that means you really have to reinvent the
process. Actually they, did they did a great job putting
this together in such a short period of time. Say automotive industry, traditionally all the
cars, no fundamental difference except style. The overall platform is essentially
the same because they all borrow or learn from the past. So you don't have to reinvent new
tooling and new assembly sequence. So we actually had to come up with a special
ultra-strong Tesla designed steel alloy. This metal did not exist before. We needed something that you could actually
manufacture but have basically no corrosion. Didn't need paint, but you can still make it in
volume. Their Vice President of Materials Engineering
Charles Kuehmann works for two Elon companies in this capacity, he works for SpaceX
and Tesla, and they've collaborated on alloys before. Steel isn't uncommon in automotive. It's frequently used in panels and frames as part
of the vehicle's structure. But Tesla's custom ultra-hard stainless steel
could have added some unique challenges. Stainless steel is hard to work with. It's much, much, much harder than all of the
grades of conventional steel, which is what the bulk of
vehicles today are made out of, including Tesla's high-volume Model 3 and Model Y. The presses that they needed were very unique
presses, massive presses, and that is where a lot of the money would go. And you can't use these presses forever because
they start to wear out. But automotive, using complete body panels with
the stainless steel is you know new concept. Stainless steel and automotive has a brief
history. Ford experimented with it in a few of its cars,
but never put it into production. The DeLorean, first introduced in the mid-1970s
and built from 1981 to 1982, was the first mass-produced vehicle with
a stainless steel skin. The company went bankrupt after building fewer
than 10,000 cars. DeLorean used stainless steel. They at least went to the trouble of using
brushed metals, but the fit and finish, they had incredible problems with that as
well. And so you would think they would either learn
from that, that it's not a good material to use, or they would find a better way to do it. Tesla's VP of Vehicle Engineering, said that Tesla
had to invent a manufacturing process called airbending, which
shapes the steel with high air pressure without actually touching the
surface. When you bend a piece of metal, you want to
maintain certain shape, and the stainless steel tend to be more unpredictable than traditional
steel. And if you get into higher strength level that
tend to be amplified. When they produce the panel, and it will actually
press it further than where it has to go, because the steel will spring back. Sometimes it's this much, sometimes it's that
much. So you never know. That's where you can get these quality issues. And the thickness which Musk has used to promote
the Cybertruck as bulletproof only further complicates things. Typically, automotive body panels for passenger
cars you're talking about in the millimeter range. From the limited information I have, we
are talking about, on the Cybertruck is a three millimeter. That's a factor of nine in
terms of stiffness. So definitely you need a lot more force and
bigger press to do it. The flat and angular design is another issue,
especially with regard to mass production. That form introduced tremendous complexity. One of the criteria I teach in my class is
stability. A component has to be able to maintain design
geometry upon some disturbance. You don't want those disturbances to introduce v
ariability. As you work on it, as you drive the vehicle. Stainless steel is very difficult to work with. When you cut it. All the mistakes basically show
up. When you have a flat plane like that, it's really
hard to hide the mistakes. In late August, Elon Musk sent an email to Tesla
employees stating: "Due to the nature of Cybertruck, which
is made of bright metal with mostly straight edges, any dimensional
variation shows up like a sore thumb and emphasized that all parts for the
vehicle need to be designed and built to sub-10 micron accuracy." Elon has even mentioned that he wants everything
to be even better fit and finish than anything else out there on the road. If he achieves the fit and finish level quality
of any normal car. Hats off to Tesla and hats off to Elon for
managing to do it. Tesla has been using gigacasting, a manufacturing
technique that creates large, single piece alloy castings that help
simplify the construction of its cars, and the Cybertruck is likely to employ the
use of it in its construction. The primary benefit, essentially, is a cost in
parts complexity benefit, right? You can you can cast a larger
proportion of the vehicle at one time. Less complexity, less assembly, less
cost. You can ensure uniformity for automotive industry
mass produced products. That's very critical. The problem is that if anything goes wrong, even
in the manufacturing process, now you have to scrap a
huge piece. There was at one point a photo of an entire
parking lot full of failed gigacastings. Um, that's part of the development process. But still, can they get all of these new and
innovative processes up and running simultaneously in
volume? With the Cybertruck finally here, Tesla must now
contend with scaling production. I think we'll end up with roughly a quarter
million Cybertrucks a year, but I don't think we're going to reach that output rate next year. We probably reach it sometime in 2025. That's my best guess. This is scaling a type of vehicle that's never
really been done before, and several other technologies that likewise nobody else is in the
industry has yet tried. But I have every confidence that they'll get it
done. Probably six months from now. You'll start to see volumes increase a little
bit, and then a year from now you'll be getting to something at a higher
level. It would not surprise me, however, if the
Cybertruck ended up being a seller that was more on the par of the Model X
volumes. Besides the difficulty in manufacturing, battery
cell production could also be a limiting factor. The Cybertruck is using Tesla's new 4680 cells,
and with a 122.4kW hour battery pack, it will need a lot of them. The Cybertruck cell, with 10% higher energy than
our Model Y cell, started production on line two in Texas this quarter. We convert to building 100% Cybertruck cells to
simplify and focus the factory. As we ramp all four lines in phase one, over the
next three quarters. I return to a quote from a colleague of many
years. This is a man who has built battery factories on
three different continents, and he said, when you have a new building with a new
staff and you're using a new cell chemistry in a new form, factor on brand
new manufacturing equipment that's really, really, really, really,
really, really, really hard. The decision to rely on that cell form factor,
which is still kind of cutting its teeth for this new product, it does pose a risk, but I
actually think that it will probably ramp faster than, for example, the
Cybertruck might. With a new vehicle on the road, a lot is yet to be
seen, how service and repair will work. Service at Tesla has been a sticking point for a
number of years. When you have a new manufacturing process, like
gigacasting for the Cybertruck, that adds another layer of complexity to the servicing
piece. The moment you scratch a vehicle like this, which
you can scratch it and you can dent it, you're going to have a hard time fixing that
car. And in that sense, it's going to be even more
expensive, in terms of maintenance. Tesla has a history of taking on challenging
projects despite the risks and delays. The Model X when they said, hey, we're going to
build this, you know, full-size SUV, but we're also going to put Falcon
wing doors on it, the Falcon wing doors delayed or helped to delay the Model X
by two years. I think that that what this really shows is that
Tesla, as a company, is still not afraid of taking risks and not afraid of failing on occasion. But with the first vehicles in the hands of
customers and Cybertrucks debuting in Tesla showrooms, the company appears
to be making progress. I kind of wonder if the combination of extreme
design and an extreme and new material to make the
vehicle out of in a new factory with a new workforce no less,
will prove to be a very long term drag on the company, getting
itself up to speed. Even with all of those things stacked against it,
it is going to be a kind of iconic vehicle in the sense that nothing
else looks like it. And probably will give Tesla some cachet for sure. This vehicle has the chance to be something really
radical in a pretty normal space, and it's incredibly functional. It's not just the way it looks. As functional as any of its competitors, if not
more. I think it's our best product. I think it's the most unique thing on the road. And finally, the future will look like the
future.
