The CEO of Tesla, Elon Musk, faces an uphill week: litigations and production troubles loom large over his vision for the future of electric vehicle empires—including the pickup truck Cybertruck. It was even worse when the $56 billion pay package was blocked once again.
Legal Blow Strikes Musk's Tesla Stock Grant
Elongating an expected award of about $50 billion of Elon Musk's stock grant, Tesla received an unwanted roadblock from a recent judge's decision. As it would result in a probable $100 billion loss for Musk, who is currently estimated at $333 billion, the stock grant would further broaden the gap between him and the second-richest man worldwide, Jeff Bezos, according to Mashable.
The decision has brought to the front of the growing tensions between Musk and Tesla's shareholders. This is because Musk had earlier used the threat of leaving the company to receive the stock grant. With the source of his nearly $100 billion quite ostensibly at risk, the businessman loses a big deal.
Tesla's Cybertruck Manufacturing Stops
Despite the pending lawsuit, something more troubling for Musk at Tesla. Sources at Tesla's Austin factory report that Cybertruck is experiencing a slowdown in its production.
Business Insider reports that workers were told that they would have to stay home for three days, signifying potential delays in the ramping up of its production. This slowdown follows a succession of similar events in October and further complicates the rollout of this much-awaited vehicle.
Typically, carmakers see sales increase in springtime with tax season and better road conditions; thus, this production slowdown is even more enigmatic. The reduction in production does not indicate that Tesla is better prepared for the future success of its new Cybertruck than everyone initially thought.
Cybertruck Preorders Less Robust Than Expected
The more serious part is the news about the state of Cybertruck of pre-orders. Although the EV maker registered two million pre-orders, one very concerning element is that most of the reservation bookings, apart from about 50,000, actually consist of customers who were never so interested in buying the product. The low deposit, $100, probably served as an excuse for people to be able to cancel without taking a great loss.
Then, of course, comes the fact that the company has hiked prices on the Cybertruck. With that and lesser-than-projected vehicle range estimates (350 miles instead of Musk's committed figure), some are already wondering if the electric truck actually has what it takes to break Musk's set sales targets.
The Test Ahead: The Sales Challenge for Cybertruck
Musk has insisted that Tesla needs to produce 250,000 Cybertrucks annually to secure the company's future. However, analysts are skeptical about whether the automaker will reach this ambitious goal, especially with limited sales in markets outside North America.
The Cybertruck, a highly anticipated electric vehicle, has yet to prove itself in international markets like Europe and China, and these hurdles could limit its global success.
To make matters worse, the Cybertruck has been dogged by recalls in the 2024 model year. There have been six in total so far. The most recent one included a defective component that could result in a power failure.
Disputes involving the social media presence of irritated Cybertruck owners, detailing some of their problems, including one case in which a Canadian owner claimed his truck died after only two hours of running time in frigid temperatures.
Can Musk Recover From this Setback?
If the Cybertruck does not see sales as envisioned and the production delays go on, then Tesla shares may really depreciate. The billionaire's stock grant, if it were still valid, would have been an offsetting loss that reduced the legal blow.
Now, will the Cybertruck, and by extension, Tesla's plans, be able to overcome these bars? Or do Musk's bets go further down the pipe?
