Part 3/15:
Cost reductions and volume scaling have played vital roles in this profitability turnaround. AJ, a former Goldman Sachs analyst, notes that the cost to produce a Cybertruck has decreased to around $80,000 in Q4, down 16% from Q3. This decline stems from increased production volumes—larger fixed cost absorption—and efficiencies gained through scale. As a result, the projected gross margin for Cybertruck is anticipated to rise from about 3% in Q3 to 9% in Q4.
Furthermore, higher sales volumes enable Tesla to benefit from economies of scale, further reducing overall costs. Interestingly, as Tesla increases Cybertruck production, the company’s average selling price for the vehicle is expected to hover around $88,000.