Get Ready, Haters: The Era Of The Tesla Cybertruck Has Arrived (Uh, Sorta)

(BLASTS DANCE HALL AIR HORN) The day we’ve been waiting for has arrived! Time to get on Twitter, which you pay for every month, and start hyping up the impending death of Ford and Chevrolet because the first Tesla Cybertruck has rolled off the assembly line in Austin, Texas. But… is this destined to be the Ford-killer Tesla fans want it to be, or a limited-volume novelty? 

That leads off today’s morning news roundup, plus some interesting details about the “Detroit of Asia”; more on the weird EV market; and some more unfortunate Ford-quality news. It’ll give you plenty to think about; trust me.

Will The Cybertruck Be The Model Y, Or The Model X’s Falcon Doors?

By now, it’s impossible to count the number of times Tesla has proven its critics wrong (yes, including your humble author, who’s big enough to admit when that happens.) This company has a weird way of just figuring things out, or getting up and hitting back twice as hard when it’s knocked down. It’s simply not to be underestimated, and I mean that sincerely and as someone who’s the furthest thing from being a die-hard Elon Musk true-believer.

But there’s also been plenty of times when Tesla’s flown too close to the sun—usually when it tries to do something cool or experimental or unproven, and it ends being a boondoggle at some point. Maybe the best example I can think of is the Model X’s Falcon Doors. Musk wanted them to be like that because he thought they looked rad, but they ended up being costly to build, costly to operate and costly to repair. He’s even said he wouldn’t do that again. Or an even harsher example is when it thought it could automate humans out of the process of making the Model 3, only to realize that “building the machine that makes the machine” is much tougher than anticipated. Or Tesla’s contentious claims around self-driving technology.

So the question is, which way will the Cybertruck go? The “first” “production” Cybertruck rolled off the assembly line in Texas this weekend:

First Cybertruck built at Giga Texas! ???? pic.twitter.com/ODRhHVsd0t

— Tesla (@Tesla) July 15, 2023

And already we can at least see it has side mirrors, unlike the concept photos you see in the rest of this post. But how successful and capable of volume sales will it really be?

I think that if the Cybertruck had a more “standard” looking body made of aluminum and steel—think a Model Y or Model S, but in truck form—it’d be worthy of making Ford executives quake in their boots. But even Musk has tempered expectations around the Cybertruck by admitting that its stainless-steel body and unique angles have been extremely difficult to build—and he’s warned his customers that “real” mass production won’t actually start until next year.

Here are some recent takes on why this thing’s such a challenge. The WSJ, this weekend:

Musk has warned that producing new vehicles, such as the Cybertruck, would dent the company’s growth. Several plans have been put on hold, he said, as Tesla focuses on scaling output. Some of these shelved programs include building a semitrailer truck and an affordable, $25,000 EV, Musk has said.

Wired, on the “alpha” build of the Cybertruck:

In May, the German newspaper Handelsblatt began reporting on the “Tesla Files”: thousands of internal documents provided to it by a whistleblower. Among those documents was an engineering report that might give some insight into why the vehicle has taken so long to come to market. The report, dated January 25, 2022, which WIRED has examined, shows that the preproduction “alpha” version of the Cybertruck was still struggling with some basic problems with its suspension, body sealing, noise levels, handling. and braking.

And InsideEVs:

However, as Model Y handover events hosted at Giga Berlin and Giga Texas have shown last year, we shouldn’t expect Tesla to deliver more than a small number of Cybertrucks to customers – most likely Tesla insiders – at the event. Production is only beginning, and Elon Musk has warned that the Cybertruck ramp will be the most difficult and longest yet.

The executive previously said that initial Cybertruck production would start in summer 2023 and that volume production would follow in 2024, with the output expected to be limited until then. “This was a tough product to design and even tougher to build,” Musk tweeted in May.

I don’t doubt demand for the Cybertruck is there. I know plenty of people who reserved one. But I have a feeling it could be more of a low-volume, niche vehicle—like a supercar, really, a halo car—rather than something that will permanently crush the Ford F-150 like a lot of blue-check types on Twitter think it is.

And there’s nothing wrong with that! Tesla built a supercar. Good for them. I think that’s what the Cybertruck will end up being. But despite the company’s smash success this year, it still struggles with designing, ramping up and building new products and I’m not sure this stainless-steel apocalypse machine will do for them what the Model Y did.

It’s that outcome, or Tesla (and SpaceX) figure out some groundbreaking, revolutionary way to do stainless steel and the whole thing takes off like crazy. I would not completely put it past them.

Meanwhile, Ford Is The King Of Recalls

Meanwhile, Ford may not be too worried about the Cybertruck, but it’s got problems of its own. It’s still working overtime to deal with quality issues that cost it a lot of money last year. And a new analysis from Automotive News indicates Ford’s had the most recalls so far in 2023:

Through June, Ford had issued 31 recalls affecting more than 4.1 million vehicles in the U.S. In the same six-month period in 2022, Ford also topped the list, with 44 recalls covering more than 6.7 million vehicles.

Overall, the number of recalls of equipment and a broad spectrum of vehicle types — light vehicles, heavy trucks and recreational vehicles among them — in the first half of this year, 515, was relatively flat compared with the 519 in the same period in 2022. However, the 16.7 million recalled vehicles and equipment in the first six months of 2023 were 11 percent fewer than those recalled in the same period last year.

Of the recalls Ford issued through June, the largest involved a callback of nearly 1.3 million older model Fusion and Lincoln MKZ vehicles for rupturing front brake hoses. The smallest recall — issued in March — covered 18 F-150 Lightning electric pickups after the automaker identified a potential battery cell manufacturing defect that caused one of the vehicles to catch fire a month earlier.

Ford topped the recall list in 2022 and 2021, also. For the first half of 2023, second place went to Stellantis, followed by BMW (though its 154,717 cars recalled were dwarfed by Stellantis’ 1.7 million.)

Ford has been making aggressive moves to fix its quality issues and the surge in recalls may be a part of that:

While Ford appears to be leading in the number of recalls, Michael Brooks of the Center for Auto Safety said it’s “hard to explain” why.

“We don’t have any information to suggest that Ford’s quality and their process is any worse than any other automaker at the moment,” said Brooks, who is executive director of the consumer advocacy group. “The more recalls to us, in a way, means that they’re protecting their customers, but at the same time, it certainly could indicate a lapse in quality.”

I’ve been reading a book about how Toyota handled its unintended acceleration crisis and in the wake of that, General Motors’ ignition switch mess and the Takata airbag nightmare, you just see a lot more vehicle recalls than you did 10 or 15 years ago. There’s a few ways to look at that, right? It could be seen as being tough on defects and making sure customer problems get fixed.

On the other hand, nobody wants their car in the shop—especially when parts are in short supply these days—and it’s just not a great look. It’s a costly one for the automakers, too. You know this is a crown Ford is eager to relinquish soon.

More Data On Our Weird EV Market

I’m definitely not one of the folks sounding the death knell for EVs before they really get off the ground. As I’ve written here and elsewhere, I think adoption “slowing” in America is a symptom of too-high costs and too-scarce public charging, mostly.

But it’s a weird market more than one in a downturn. Here’s Automotive News with more data:

New EV registrations rose by a healthy 68 percent in the January-to-May period to a record 447,514 vehicles. But about half of the increase came from market leader Tesla, the data shows.

Hot EV brands from last year — including Ford, Kia and Lucid — are now cooling as Tesla continues to sell 6 of every 10 EVs in the U.S.

Additionally, those that entered the market with some fanfare, including Cadillac and Porsche, are near the bottom of the 25 brands appearing in the latest registration data.

Overall, EVs rose to a 7 percent share of the U.S. light-vehicle market in the first five months of the year from 4.6 percent a year earlier. But analysts see tougher days ahead as consumers balk at relatively high prices and interest rates.

“EV sales records will continue to be set and EV growth will continue to outpace overall industry growth, but the days of 75 percent year-over-year growth are in the rearview mirror,” Cox said. “The hard-growth days are ahead.”

Emphasis mine there, because I like how that’s phrased. Basically, EV sales are up year-over-year, just not at the crazy rate they were for a while. Take Kia, for example; registrations of both the EV6 and Niro EV are down nearly 30% compared to last year and it’s losing overall market share.

Hyundai is doing a little better overall, in part because it’s “been more aggressive than Kia in offering customers lease deals that incorporate a $7,500 federal EV discount.” (The two companies are corporate siblings that share hardware, but they’ve very separate in product planning, marketing, sales strategies, and things like that.)

Also from that data: Nissan’s been flat due to the death of the Leaf and slow Ariya registrations; Lucid is behind yearly forecasts; Rivian’s actually doing quite well but seems constrained by production capacity as a small startup; and the Porsche Taycan and Tesla Model S are way down.

The Volkswagen Group’s a bit perplexing to me at the moment. The Taycan’s great—it’s shit-fuck-crazy fast, for lack of a better term—but when was the last time you heard anything about it? Or the Audi e-tron cars that were among the most credible early Tesla competitors? I think VW’s getting its house in order on the production and software fronts. In the meantime, it’s probably holding off on big new moves until it does.

Also, a major winner this year? BMW, whose i4 and iX models posted a 15x increase compared to last year. Not bad, BMW. I’m getting an iX next month and am eager to tell you all about it.

The point is, it’s best to look at this market as a long-game one, with all the ups and downs you see with any new technology and the broader auto industry as a whole. I’m not going to start writing obituaries after one or two questionable quarters—not with all the battery investments happening in the U.S. alone that will eventually drive prices down.

Thailand Rises In The EV Era

Did you know Thailand is considered “the Detroit of Asia“? I actually did not! But it makes sense. It’s Southeast Asia’s largest auto manufacturing hub, not just from car plants but suppliers, powertrain plants and more. Besides cheaper (but now very skilled) labor than other countries, it maintains steep tariffs on imported vehicles, both of which have led to a very robust local manufacturing ecosystem.

Now, not only is it becoming a giant manufacturing hub for EVs—especially from Chinese brands—demand for those cars is also skyrocketing there too. That’s also another big threat to the Japanese automakers, who have long dominated in Thailand but are now lagging on the EV front.

Here’s Bloomberg on why Thailand’s a place to watch:

The nation has already attracted 75 billion baht ($2.2 billion) from the EV industry, led by a slew of Chinese investments from BYD Co., Great Wall Motor Co. and SAIC Motor Corp. Changan Auto Co. and GAC Aion New Energy Automobile Co. are set to soon finalize their investment plans, and Chery Automobile Co. is also in talks.

Companies investing at least 5 billion baht in EV manufacturing can be exempt from the 20% corporate tax rate for three to eight years. Additional incentives for key EV parts production can get a 50% discount on taxes for a further five years.

The next step is to lure battery makers amid stiff competition from the US and Europe, which have rolled out programs like the Biden administration’s Inflation Reduction Act to build a domestic battery industry.

To that end, a multibillion-baht subsidy package is in the works and will be put to the new government for approval, says Narit Therdsteerasukdi, the secretary general of the Thailand Board of Investment, which oversees foreign investment into the country.

Remember, all of those Chinese automakers have global ambitions, so moves like this are just the start.

Your Turn

Where do you think the Cybertruck will net out? One on every corner like the Model Y is (depending on where you live, obviously) or destined to be Tesla’s dystopian-looking supercar?