Why Is the Tesla Cybertruck Deposit Just $100?

Why did Tesla set the preorder deposit so much lower than before?

The Tesla Cybertruck breaks many molds. Before its unveiling, I had opined as to how Tesla’s move into pickups would be an unusual and risky move for the company…I could have not imagined just how unusual the design would eventually turn out to be. The truck managed to polarize fans and critics alike. Love it or hate it, the Cybertruck has generated huge publicity for Tesla.

But there is one question that has been nagging at me. This is a question that no one else seems to be asking. Why did Tesla set the deposit for preorders so low? Prior to the Cybertruck, Tesla used preorder deposits to gauge consumer interest as well as a means of raising funds for R&D. The Model S and X, for example, both required a $5000 deposit to preorder. This amount was (understandably) reduced to $1000 for the Model 3, which is a much cheaper car and intended for the mass market.

But why then did Tesla set the preorder deposit for the Cybertruck at a mere $100… just one-tenth of the similarly-priced Model 3?

One guess is that Tesla knows that the Cybertruck design is very unconventional and the trucking market isn’t exactly EV-friendly, so a $100 refundable deposit will provide a lower barrier of entry for prospective buyers. This might, in turn, be a more accurate gauge of consumer interest than if it had been set to $1000. But actually, this does not make any sense. A higher deposit, even if it is refundable, should be a more accurate measure of consumer interest in the vehicle because someone plunking down $1000 simply has more skin in the game than someone doing shelling out $100. This answer just doesn’t satisfy me.

An alternative explanation is that the $100 deposit is not meant to be merely a measure of interest in Cybertruck alone, but rather a referendum on the angular design aesthetic as a whole.

The Cybertruck stands to undo several decades of automotive design, both in terms of how cars appear visually and how they are built. Tesla is trying to determine if people will accept this angular aesthetic before they go on designing a new line of vehicles. A $100 deposit provides a better measure of casual interest and acceptance than it would actual Cybertruck orders. Tesla, in other words, needs to know if people will accept the design but does not need these deposits to translate directly into Cybertruck orders.

A lower barrier to entry provides valuable feedback as to whether or not consumers will be interested in an unpainted vehicle made from bent sheets of steel. The Cybertruck might be an effort to test the waters for a new era of electric vehicles that are vastly simpler to design and cheaper to build.

Elon is known for thinking in terms of “First Principles,” which involves the jettisoning of everything that we “know” about something and working upward on the basis of physics. Until now, Tesla was constrained by wary investors and consumers who would be hesitant to accept radical breaks automotive tradition.

This is why, for example, the Model S originally has a black “nose” which resembled an automotive “grill.” The black plastic “grill” was not necessary from a mechanical standpoint, but the vehicle looked strange to prospective consumers without it. For a century before it, all vehicles had a black or chrome grill, in 2012 an upstart Tesla was not going to scare consumers away by taking design aesthetic risks. By the time the Model X was released in 2015, Tesla was brave enough to remove the faux grill. Today, Tesla no longer needs to prove to the world that they can make better cars than anyone else. Now they can take bigger risks and attempt to rethink the automobile from first principles.

The design of the Cybertruck entails fewer dies, fewer welding robots, less capital investment, a smaller factory footprint, fewer chemicals baths, no paint shop, no complex series of coatings….etc. This will make the Cybertruck one of the simplest vehicles on the market in terms of manufacturing complexity. If consumers will accept the odd-looking design, there is nothing to stop Tesla was launching an entire lineup of stainless steel origami vehicles. Elon partially confirmed this line of thinking on Twitter when he mused about the need for a smaller mid-sized version of the Cybertruck.

The Cybertruck is about more than building a great truck. The Cybertruck is an acid test for an entirely new generation of vehicles using stainless steel monocoque construction. With 250k deposits now confirming consumer acceptance, there is little question that Tesla’s engineers are thinking up new ways of folding steel.

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