Elon Musk Says Tesla Will End Cybertruck Production -- Here's Why

Tesla(NASDAQ: TSLA) CEO Elon Musk formally unveiled the Cybertruck in 2019. Actual production didn't begin until 2024. Next year, production will formally end, according to a new tweet from Musk.

Musk shared on social media that the electric vehicle (EV) maker will wind down "production of the Cybertruck at Gigafactory Texas around the middle of next year."

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Why is the Cybertruck going extinct? Slow sales are largely to blame. According to estimates, Tesla is only selling a few thousand units per quarter. If the Cybertruck were a mass success like the Model 3 and Model Y, it likely would not be getting the axe.

But there's another obvious reason that Tesla is winding down production for one of its least successful models ever.

Here's why Tesla is ending Cybertruck production

Tesla's $1.4 trillion valuation isn't based on its success as an automaker. Instead, the market is pricing in plenty of growth for other opportunities, namely AI, humanoid robots, and self-driving cars. All of these initiatives will be capital-intensive to scale. Freeing up capital by ending a low-volume, low-potential model is a wise decision for Tesla as it pivots its priorities toward the future.

Just as importantly, Tesla will then be able to use the factory space to focus on Cybercab production. Musk said so directly, tweeting that ceasing Cybertruck production is designed specifically "to make room for increased Cybercab production."

Some experts believe that the robotaxi market will eventually be valued at $8 trillion to $10 trillion globally. Success in that market can move the needle for Tesla in a way Cybertruck demand never could.

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