What's Happening With Tesla's $25,000 Sedan and the Cybertruck?

Tesla(TSLA) - Get Tesla Inc Report CEO Elon Musk talks a lot. That's not always good for his company because he sometimes shares ideas that maybe aren't quite ready. Musk has talked about a variety of Tesla models that don't exist, including the dreamed-about $25,000 sedan, and he has built up hopes for a humanoid robot.

It's important to note that Tesla has been raising prices and has a large backlog of orders. That alone makes offering a cheaper product unattractive even if Musk someday wants more people to drive his electric vehicles as part of his goal of making the Earth a greener place. His heart appears to be in other places right now.

"I think actually the most important product development we're doing this year is actually the Optimus humanoid robot. This, I think, has the potential to be more significant than the vehicle business over time," he said during his company's fourth-quarter earnings call.

Has there been any sign that Optimus exists? A prototype? The company hasn't shown one, and while a robot seems like a cool idea, what exactly would it do (other than build Skynet and perhaps create a Battlestar Galactica-type situation).

Musk's a genius with very little filter. That leads him to talk about things that don't exist and may never exist. These include the Tesla Cybertruck and its long-discussed $25,000 sedan.

Also Read: Who Can Afford a Tesla, Ford, or Chevy Electric Vehicle?

Are We Getting a $25,000 Tesla?

When Tesla released its Model 3, that was supposed to be the company's "affordable" car, costing $35,000. The problem (at least for consumers) is that the $35,000 version of the car has never really existed. That's the base Model 3, and demand has made it so Tesla has never really had to produce that version.

So with Tesla struggling to keep up with demand in general, the company seems unlikely to build a car that would draw huge public interest but, by the nature of its price, would not be wide-margin.

"Well, we're not currently working on the -- on a $25,000 car," Musk said. "We -- you know, at some point, we will, but we have enough on our plate right now, too much on our plate, frankly. So, you know, at some point, there will be. I think that's sort of a question that -- it's sort of the wrong question, really,"

So, Musk confirmed that Tesla won't be building a $25,000 car, but his reasoning appeared to be that doing that isn't necessary.

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"It's -- really the thing that overwhelmingly matters is when is the car autonomous? I think, at the point in which it is autonomous, the cost of transport drops by, I don't know, a factor of four or five," he added.

What About the Tesla Cybertruck?

Musk first introduced the Cybertruck (to a very mixed reaction) in 2019. It has a website and the company has been accepting deposits on the curious-looking vehicle, but it has steadily (and quietly) delayed its production.

That appears to be what's happening again.

"The fundamental focus of Tesla this year is scaling output. So both last year and this year, if we were to introduce new vehicles, our total vehicle output would decrease. This is a very important point that I think people do not -- a lot of people do not understand," Musk said.

So, basically that means no Cybertruck in 2022 because Tesla needs to scale production of its current vehicles. That does make sense and Musk made clear that work on trucks has continued behind the scenes.

"We will, however, do a lot of engineering and tooling, whatnot to create those vehicles: Cybertruck, Semi, Roadster, Optimus, and be ready to bring those to production hopefully next year," he said. "That is most likely."

So, maybe in 2023? Musk did lay out some of the thinking behind the Cybertruck.

"There's a lot of new technology in the Cybertruck that will take some time to work through," he added.

"And then, there's a question of, like, what's the average cost of Cybertruck and to what degree is that affordable? You know, there's -- you can make something infinitely desirable, but if it's not affordable, that will constrain people's ability to buy it because they don't have the money.

"I worry more about, like, how do we make the Cybertruck affordable despite having awesome technology? That's the thing that will really set the rate.

"Aspirationally, we'd like it to go, in terms of just a rough order of magnitude, we'd like Cybertruck to be at least on the order of a quarter-million vehicles a year. But it will take us a moment to get to that level."