Tesla Hasn't Had a Successful New Product Launch Since JB Straubel Stepped Down

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As has been widely reported, Tesla is about to end Cybertruck production. The Cybertruck has been a shocking failure. I’m sure there are more detailed analyses out there somewhere, but this short response on X from Ben McCombe that Tina Casey included in her article on the matter sums it up very well:

“Installed tooling to build 125k Cybertrucks a year.

“Sold 70k over 3 years.

“Spent $2bn on research and development.

“Made just $100m in gross profits from sales.

“Net project loss of $1.9b”

That’s pretty wild. A net project loss of around $2 billion. Now, I have to admit that I haven’t fact checked the numbers here, but what we know for certain is that Tesla planned to produce a lot of Cybertrucks per year and ended up producing a small fraction of that target. In fact, the annual sales target for the Cybertruck was higher than 125,000 — it was 250,000, with a goal of getting up to 500,000!

The Cybertruck was hyped up as having more reservations than any vehicle in history and was supposedly going to shatter records and transform the market. I warned people on many occasions that the reservation total was not a real reservation total and was definitely not a reliable indicator of demand because a) a reservation only required a $100 refundable deposit, and b) a ton of people made reservations after Elon Musk said that you could lock in the price of lifetime Full Self Driving when making a reservation (so, you’d only have to pay $6,000 for FSD no matter how much the cost of it went up in the following years). Anyway, the Cybertruck had other issues as well when it finally arrived. It cost about twice as much as it was supposed to cost and it had about half as much range as it was supposed to have. In other words, it was not even close to the vehicle it was supposed to be — its range per dollar cost was about ¼ what it was supposed to be.

The Cybertruck was supposed to be the next big thing after the Tesla Model Y. It was supposed to disrupt the gigantic US pickup truck market. The Model S was a superb and widely acclaimed car, if a bit more expensive than the mass market could afford. The Model S did in fact compete superbly well with the leaders in its segment, the BMW 7 Series and Mercedes S-Class. The Tesla Model X brought a similar offering in a larger package with some fun extra elements (falcon-wing doors, self-presenting doors, a third row). The Tesla Model 3 then completely shook the automotive world as a tremendous market phenomenon and perhaps the biggest product launch in history (in terms of total revenue). The Tesla Model Y was basically the Model 3 in a more popular crossover package and eventually became a much higher selling vehicle. In fact, it became the highest selling vehicle model of any kind in multiple years. Then JB Straubel stepped down as CTO.

Due to their EV passions, JB Straubel and Elon Musk were introduced to each other and had lunch together to talk about electric airplanes (Elon’s dream) and then electric cars (because JB talked more sense into Elon). Then the two of them were introduced to Marc Tarpenning and Martin Eberhard, who had founded Tesla Motors and just barely got started on the idea. After a while, Tarpenning and Eberhard left the company, and Musk and Straubel truly led its development and growth into an automotive superpower (as briefly described above). Since JB Straubel stepped down from his role as CTO of Tesla, however, if one thinks about it, it’s hard to identify any successful product launch from the company or much significant improvement at all.

Straubel left his CTO position in July 2019. The Model Y was unveiled in March 2019 and was about ⅔ the same as the Model 3. It would seem that getting the Model Y designed and prepared for launch was the last big project Straubel worked on. (Note that the Semi was unveiled in November 2017 but was long delayed due to battery supply, according to Elon Musk.) Since the Model Y, what significant product launch have we seen from Tesla? There was the Cybertruck, as we’ve already discussed. That was unveiled in November 2019. When you think about the timing now, did Straubel disagree strongly with Musk on the Cybertruck and decide it was time to move on when Musk pushed forward with his idea for an electric truck? It took another 4+ years for Tesla to start delivering the Cybertruck, in contrast to Model Y deliveries starting in January 2020, less than a year after the model was unveiled. More recently, the Cybercab has been developed, unveiled, and is now in production. A consumer car smaller and cheaper than the Model 3 was never developed and unveiled — just a stripped down, decontented Model 3 — and there basically haven’t been any other product unveilings since Straubel left his role as CTO. Elon Musk has published a couple of somewhat scattered, rambling “master plans,” but we haven’t gotten any significant new products aside from the Cybertruck and the just arriving Cybercab.

Even looking over on the energy storage side of things, the Tesla Megapack was launched in July 2019, the month Straubel stepped down from his role as CTO. Did Straubel just decide he had done enough once he had finished the Megapack launch and gotten the Model Y essentially ready for market? Did he have conflicts with Musk on where to take the company from there?

Yes, there’s been incremental product development and refreshed versions of Tesla cars and energy storage systems. There are still plenty of engineers working on improving things. However, there doesn’t seem to be the same leadership in new product development, and there also isn’t the same practical, moderating element that Straubel seemingly provided to Musk’s more wild, grandiose, sci-fi inspired dreams and ideas.

Perhaps this is all misunderstanding the roles of the two men to some extent. Perhaps things would not be much different if Straubel had stayed in the CTO role and had the same influence he had before leaving. He is still on the board of directors. (What that actually means is unclear, though.) Perhaps Tesla’s success and business would still be primarily based on the Model 3 and Model Y, without new transformative products. Or perhaps we would have had a more normal pickup truck from Tesla, an electric van, better batteries, a better market rollout of the Semi, and other products. Perhaps the Cybertruck, an epic product failure, never would have been shown to the product and hyped up unrealistically with specs and figures disconnected from what was going to be possible. Perhaps we’d have a Model C (affordable, compact Tesla) rather than a Cybercab. Perhaps Tesla would be a very different company.

Who knows? We don’t know the ins and outs of JB Straubel and Elon Musk’s relationship, or how much Straubel actually led Tesla in his CTO role. We don’t know how much Straubel tampered down Musk’s worst instincts or guided product development. We still really don’t even know why Straubel left. According to Tesla, it was so that he could focus more time on Redwood Materials, but why wasn’t that business within the umbrella of Tesla in the first place? Vertical integration has long been a key element of the company. Who knows? There’s a lot we don’t know and never will. However, what we do know is that since JB Straubel stepped down from his role as CTO of Tesla, we haven’t seen a significant, successful new product launch at the company. We’ll have to wait a bit longer to see if the Cybercab is one, and whether that sets a new, positive course for the future of the company or not.

Featured photo from International Transport Forum (CC BY NC-ND 2.0 license)