Tesla’s Cybertruck is a masterclass in failing upwards

Getting things wrong is an essential part of getting things right. So for all of the ridicule and vandalism that Tesla’s Cybertruck attracted during its brief life, it’s hard to fault Elon Musk for trying new things. Especially since his investors seem to prize his successes while ignoring his failures.

Musk told followers on X that he is “winding down” production of the Cybertruck at his Texas gigafactory, and pivoting to production of his self-driving taxi, the Cybercab. The distinctively angular vehicle — which Musk variously claimed could serve as a boat and might one day traverse the surface of Mars — had been plagued with product recalls and negative brand associations. He had predicted annual sales of 250,000; in the first nine months of this year, Cox Automotive counts fewer than 12,000.

Trial and error is the raison d'être of tech companies, of course. Investors usually just ignore moonshots until they seem to have real value. Alphabet’s “other bets” segment has made cumulative losses of around $57bn since 2014. But from that money pit sprang innovations like self-driving car company Waymo, which is now worth $147bn, according to PitchBook. And since the internet search giant has made $800bn of overall operating profit, nobody much minds.

Even Tesla bulls attributed little value to the Cybertruck. Former Tesla analyst Adam Jonas of Morgan Stanley, a reliable cheerleader, suggested in 2023 that it might be best thought of as a “cult car” rather than a blockbuster. Deutsche Bank, which has continually rated Tesla a “buy”, sketched out numbers in 2024 that suggested the truck might contribute just 5 per cent of the company’s gross profit by 2028.

Musk has moved on to the next big thing. Optimus, his humanoid robot, could be a “$25tn market cap situation”, he has suggested, making Cybertruck feel like a blip. And flops can still add posthumous value to future projects. Electrical, mechanical and battery technology finessed to serve the ill-fated pick-up truck will help power Optimus and the Cybercab too.

If only the Cybertruck had proved as robust as the Elon Musk hype premium. Tesla’s enterprise value equates to 11 times the coming year’s forecast revenue, according to LSEG, where automakers General Motors and Ford trade at a fraction of a year’s sales. Corporate sibling SpaceX, even at a depleted $1.7tn, also trades at an exuberant 11 times revenue. Musk wasn’t so hot when it came to selling a pick-up truck, but he still knows how to sell himself.

john.foley@ft.com