In a sea of bad news for Elon Musk, there was one piece of good news: Tesla has started making its electric bakkie. The Cybertruck, as it’s called, is a futuristic-looking pickup that was first announced in November 2019. The Tesla CEO’s unveiling of it featured what is now a meme when he was trying to demonstrate how tough the car’s glass was. A steel cannonball was thrown against the window, which was promptly smashed, and Musk blurted out “Oh my f****** god” to riotous laughter.
Electric bakkies and big promises
Last month, Tesla announced, on X, obviously, “First Cybertruck built at Giga Texas!” referring to its Gigafactory construction site. “Congrats Tesla Team!” Musk reposted. Getting the first model off the production line is a significant step, but it’s unlikely to be a fully-ready production model. It’s more likely a so-called “production intent” car used to test if the production line is ready.
Musk told a shareholder meeting in May that the Cybertrucks should be ready by September. “We’ll start production later this year and we’ll start handing over cars later this year,” he said of the electric vehicle originally slated to cost $40,000.
“I’d say a quarter million a year is a reasonable guess and it might be 500,000, I don’t know,” Musk said, warning that its price may go up. “We’ll make as many as people want and can afford. It’s going to be hard to make the cost affordable because it is a new car, new manufacturing method, so in the grand scheme of things relative to the production rate of all the other cars we make, it will be small. But still very cool.”
This comes as Tesla’s directors will give back $735 million in bonuses after a US court ruled last month to settle a shareholder dispute that was filed in 2020. This affects Musk, his brother Kimbal and Oracle co-founder, Larry Ellison, and other directors, who will not receive compensation for being on the board for three years, ending in 2023.
“Musk has installed his family and friends on the company’s board and through them he dominates and exercises control over Tesla and is able to avoid independent oversight of the way he runs the company,” according to the lawsuit. “In return, with Musk’s blessing and vote as a director, the director defendants have consistently paid themselves unfair and lavish compensation every year from 2017 through 2020. Their disloyal, self-interested compensation determinations have deprived the company of tens – if not hundreds – of millions of dollars”.
This ruling – in which the directors “deny any and all allegations of wrongdoing, fault, liability, or damage whatsoever” – doesn’t affect Musk’s own very generous $56 billion remuneration deal. This is also the subject of another shareholder court case which began last year and is expected to be finalised soon.
Musk sold $15 billion in Tesla stock and used more as surety for his $44 billion purchase of Twitter (now known as X), which he has admitted is now worth half of that. As US advertising revenue has crashed by nearly 60% in a five-week period this year, one investor wrote down their stake by 47%. “We take fair valuation very seriously and absolutely have had to write that [Twitter] down,” ARK Investment Management chief executive Cathie Wood told the Wall Street Journal.
Tesla shares tanked 65% from the time he announced his Twitter/X plans to December. That’s a whopping $705 billion, according to Forbes. It has also cost Musk his title as the world’s richest person, although I’m sure he isn’t heartbroken as number two.
But he now has at least one Cybertruck on the road and that bakkie may have a lot to do with Tesla’s stock rebounding – if Musk can pull off his optimistic predictions.
- This column was first published on Daily Maverick
