Tesla advises production workers at its Cybertruck facility to take a four-day weekend, further indication of sluggish demand for the electric pickup truck, which had initially garnered hundreds of thousands of pre-orders.
According to a report by Enterprise Insider, which secured an email sent to Cybertruck manufacturing staff at Tesla’s Austin, Texas facility, employees were informed that they “don’t need to return to work” on Tuesday, Wednesday, and Thursday of the current week (December). Staff will continue to be compensated for their assigned work periods regardless of any changes in operational requirements.
Despite Tesla’s silence on the matter, four employees reportedly told Enterprise Insider that their schedules have been unpredictable for the past month, contributing to the production halt.
With Tesla’s critical delivery period fast approaching, primarily for its flagship model, the timing raises suspicions.
Currently, Tesla is among the rare electric vehicle manufacturers to have delivered fewer units so far this year compared to 2023. Despite rumors to the contrary, electric vehicle (EV) gross sales surged significantly in 2024, a trend that defied expectations as Tesla suffered a decline in the first half of the year.
The company reported a third-quarter boost primarily driven by significant growth in Chinese sales, yet still lagged behind last year’s performance.
Due to these factors, Tesla is going all out in its final quarter effort to close the year on a high note. Tesla has enhanced its referral programme by introducing more enticing rewards, streamlined the pricing structure of Model Y leases, and introduced greater adaptability into its leasing options.
Notably, Tesla has further slashed Cybertruck lease prices, just a month after initially introducing leasing options for the vehicle.
Tesla’s struggle to generate significant interest in its polarizing vehicle is another indication that demand may not be as strong as initially expected.
Following its debut in 2019, the Cybertruck garnered over 250,000 pre-orders within just weeks, eventually exceeding a staggering 2 million reservations according to crowdsourced estimates.
However, upon impact with the street, the situation unfolded differently from what was intended. The vehicle arrived late and exceeded our budget, further disappointing us by missing some key features that were initially guaranteed. Initially, the Basis Collection’s top-tier models started at $100,000, a significant departure from its initial promise of an affordable entry-level price point of $40,000. The all-new Model is now listed on the market with a starting price tag of $79,000, although a previously announced rear-wheel-drive variant worth $61,000 has been quietly removed from Tesla’s website.
While it’s undoubtedly the top-selling electric pickup truck in the US and the third most popular EV with a very high average transaction value, generating significant revenue for the company.
Despite initial fervor, demand for the car has fallen significantly short of the lofty projections. The approximately 2-million-car backlog seems to have been cleared by around October this year, as Tesla started accepting orders without prior reservations. At the time, Tesla had reserved approximately 30,000 complete Cybertrucks.
It’s possible that this issue is the primary cause of the plant’s closure. Companies may temporarily halt production lines for several days or weeks when inventory builds up faster than sales, as a means of preventing excess stock from accumulating on the balance sheet and impacting financial stability.
It’s plausible that various factors – possibly including a production line adjustment or modifications linked to the current Cybertruck inverter recall – could be contributing causes. Nonetheless, with regards to the former, the end of the quarter may be a more opportune time; as for the latter, one would expect adjustments to have been made closer to when the issue was first identified and would likely not necessitate shutting down the entire line for three days.
When various factors contribute to a decline in demand, organizations frequently dispatch their public relations teams to discuss and manage perceptions, aiming to allay concerns among investors and prevent market jitters from escalating. As there’s no official statement from Tesla, it’s reasonable to consider alternative explanations; accordingly, manufacturing potentially exceeding demand might be a factor in the production pause, aimed at achieving balance between the two.
