Tesla's 2024 Growth Hinges on Cybertruck's Weak Demand Due to Being 'Costly' and 'Unusual'

Cybertruck sales are below expectations due to high prices and its unusual design.

By Thea Felicity

Dec 20 2024, 13:58 PM EST

Tesla To Cut 10 Percent Of Workforce As EV Sales — AUSTIN, TEXAS - APRIL 15: A Tesla Cybertruck sits on a lot at a Tesla dealership on April 15, 2024 in Austin, Texas. Tesla is planning to lay off more than 10% of its employees as the company continues to see a decrease in sales, which began earlier this year. Brandon Bell/Getty Images

For Tesla, delivery growth in 2024 hinges largely on the success of the Cybertruck. Analysts argue that while there was euphoria surrounding the truck in the beginning, demand remains much lower than projected.

The unusual design and a higher price than expected are key turnoffs in this conservative full-size truck market.

According the Reuters, Tesla delivered 1.81 million vehicles in 2023, a record high; however, increasing competition and other economic factors are shifting customers toward cheaper hybrid models from full electric vehicles.

Cybertruck's Expensive Price

Met with extremely polarizing opinions, especially in relation to its trapezoid shape and the fact that it has stainless steel, Cybertruck's price is also perceived as miles ahead of what would be expected. Musk said earlier that the car was going to be at $40,000, however, models start from a range of $75,000 and go almost all the way up to $100,000.

Analysts say price and design is one of the biggest reasons demand has softened.

In addition, Tesla's decision to allow direct orders and its inventory of Cybertrucks available for immediate delivery suggest that supply might be outpacing demand. Recent leasing offers starting at $899 per month further indicate efforts to boost sales.

Other incentives include free fast charging, which can even be used in their homes, for three months, and its driver assistance software, per VCPost.

However, registration data indicates a 7% drop in Tesla's US registrations between October 2024 and the previous year. Registration for Cybertruck specifically has been down month-over-month since August, leading to questions on whether Cybertruck will feature in Tesla's growth plans. Sales of used Cybertrucks are also slower than others, indicating weakening interest in the secondhand market.

While Tesla is expected to produce only 1.81 million in 2024, equaling last year, the Cybertruck's prospects are still crucial. Analysts reported by Finimize point out that Cybertruck needs to do better as Tesla cannot afford to lose space in the market amid mounting competition and shifting consumer preferences.