The Cybertruck Is A Much Bigger Failure Than You Think

It goes beyond bad designs and pitiful sales.

Photo by Yiming Ma on Unsplash

What is your favourite Musk disaster? There are so many to choose from. Nothing is quite as spectacular as watching a Starship explode for the millionth time. DOGE’s failure to even come close to its targets was so embarrassing to witness that you couldn’t help but feel embarrassed. But the Cybertruck is possibly the most spectacular, humiliating, and impactful mistake he has made so far. Let me explain.

When the Cybertruck was first announced, over a million people supposedly reserved one for $100. Four years later, the Cybertruck launched, with Tesla moving to ramp up production to 500,000 units per year!

However, the Cybertruck was larger, had a shorter range, charged more slowly, was more expensive, was less practical, and had a significantly lower towing capacity than what was promised. It even lacked some guaranteed features such as an exoskeleton and a battery extender. Then, when people began to get their hands on these disappointing Cybertrucks, they realised the glued-on stainless steel panels rust quickly, scratch easily, and even fall off within a matter of weeks of delivery. Those who actually decided to use this truck as a truck discovered it is more fragile than Musk’s ego, with multiple stories coming out about Cybertrucks bricking and voiding their warranty due to their owners trying to ford a shallow stream or going through a car wash.

So, almost everyone with a reservation cancelled. In 2024, Tesla delivered just 39,900 Cybertrucks, and by the early months of 2025, Tesla lots were full of unsold Cybertrucks. That means 96% of Cybertruck reservations were cancelled!

Tesla has only sold 10,712 Cybertrucks so far this year, averaging just over 5,000 units per quarter. That means demand has more than halved since last year and is a mere 4% of what Musk and Tesla had originally hoped and planned for. As such, despite Cybertruck production being heavily reduced (at a significant cost), Tesla is currently sitting on around $1 billion worth of unsold Cybertrucks.

Tesla invested five years of development and more than $2 billion in the Cybertruck, which, along with the 4680, clogged up nearly all of the company’s research and development bandwidth. So, what has Tesla got in return for this huge investment of time and money?

Well, Tesla has announced that Cybertruck has tipped into profitability, so let’s be generous and say that it has roughly the same operating profit margin as the rest of Tesla’s operations, which is currently 2.1%. That is $100,000 multiplied by the roughly 50,000 units sold, multiplied by 2%, which gives you a profit of $100 million. In other words, Tesla’s Cybertruck investment is running at a 95% loss!

If demand stays at its current level of 20,000 units per year — which it won’t; it will decrease even further very quickly — it would take Tesla another 47.5 years to get its $2 billion back.

And don’t forget, the 4680 cell was really designed for the Cybertruck. The Cybertruck is the only Tesla model that exclusively uses them and was expected to make up the vast majority of their sales. Tesla has invested over $3.6 billion in the 4680, and it is as significant a failure as the Cybertruck. It charges slower, is less energy dense, and is more expensive than promised. It’s also years behind schedule at this point. But last year, Tesla announced that the 4680 hit an important milestone. After four years of production, it finally became Tesla’s cheapest battery. However, Tesla buys loads of BYD Blade Batteries, which can charge just as fast and are only marginally less energy dense than the 4680 and cost around $70 per kWh. These batteries also include a sizeable profit margin for BYD. In other words, BYD’s battery is miles ahead of the 4680.

Unfortunately, the Blade Battery is old news. BYD, CATL, and other battery giants all have batteries that cost the same or less than Tesla’s 4680 but charge significantly faster, as well as being substantially more energy dense. Take BYD’s Super e-Platform battery, which charges at 1000 kW and goes from 10% to 80% in seven minutes, and estimates put its cost per kWh very close to the 4680.

So, that’s an additional five years of development and over $3.6 billion in investment draining Tesla’s capacity for a product that is already obsolete. Oof!

Why did Tesla make these huge mistakes? Well, Musk bought out a company that was developing cathode dry-coating, a questionable way to decrease the cost of cells while increasing their performance, and wanted to make the most of the exclusive IP. That is despite the fact that the entire industry was moving towards LFP cells and 800V architecture, which are significantly more reliable and cheap but less exclusive ways to get the same results. Likewise, unlike all other previous Tesla models, Musk had heavy influence over the Cybertruck design, rather than letting industry experts decide the direction and make critical decisions.

Essentially, the 4680 and the Cybertruck failed because they are overt manifestations of Musk’s misdirected hubris.

But it didn’t have to be that way. Imagine if Musk politely excused himself and allowed his designers and engineers to deepen the lead they already had. The Model 3 is now eight years old, and despite its recent redesign, it remains fundamentally the same car with the same specs as it was in 2017. What if, instead of creating a rusty dumpster on wheels that no one wants, Tesla made a better Model 3?

Well, MG did just that with their IM5, which, across the pond in the UK, we can already buy, and it completely dunks on the Model 3. It uses 800V architecture, rear-wheel steering, a dynamic chassis, and highly optimised manufacturing to beat the ageing Tesla at nearly every metric without requiring breakout technology. And these are all things the Model 3 can’t adopt, as they are fundamental, meaning the Model 3 would need a full redesign to compete.

Sure, the base IM5 is basically neck and neck with the Model 3 Standard, as shown below:

But, when it comes to the long-range variants, the IM5 begins to pull a sizeable lead. Far cheaper, way faster charging, much longer range, and significantly more bang for your buck.

However, it’s the performance variants where the IM5 just leaves the Model 3 in the dust.

The IM5 is £20,000 cheaper, with the same acceleration, much more range, and again, far quicker charging. But it’s no slouch in the corners either. With rear-wheel steering and a dynamic chassis, motor journalists aren’t comparing it to the Model 3 Performance but to the best-handling EV so far, the Porsche Taycan.

The IM5 is on sale in the UK, the EU, Australia, and almost all of Asia. These are all areas where Tesla sales are in steep decline and MG’s EV sales have been soaring for years. Realistically, don’t be surprised if the IM5 and its similarly priced and spec’d bigger brother, the IM6, suddenly outsell the Model 3 and Y by a huge margin.

Just imagine if, instead of the Cybertruck and 4680, Tesla had completely redesigned the Model 3 and Y, like the IM5 and IM6. They would still have their lead over the EV industry, their sales wouldn’t have collapsed, they wouldn’t have wasted billions of dollars on terrible projects, and they wouldn’t have had to pivot to terrible AI self-driving to try and justify their value. But no, Musk knew better, and now Tesla is being left behind.

And let’s not forget that the bulk of Musk’s ridiculous wealth and power comes from his Tesla shares. That is why the Cybertruck is his biggest failure, because Musk didn’t just fumble the bag — he took a jackhammer to the very foundation of his empire.

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Sources: Car Magazine, Futurism, Autocar, Car Magazine, Autoexpress, Tesla, PM, NATA, PushEVs, Will Lockett, MG