Tesla’s $2.67B Cybertruck Battery Deal Is Now Worth Just $6,776
- Tesla signed a $2.67B Cybertruck battery deal in 2023.
- The deal has been slashed to just $6,776 after poor sales.
- Cybertruck was expected to sell 250K yearly, hit under 20K.
Several years ago, Elon Musk proudly proclaimed that Tesla would be moving as many as 250,000 Cybertrucks annually. The electric pickup was billed as a disruptive force, set to shake up the truck market. In reality, it hasn’t come anywhere near those targets. This year, Tesla is expected to sell fewer than 20,000 Cybertrucks, less than 10 percent of that overly ambitious goal.
Read: This Shop Tore Down A Cybertruck To Do What Tesla Wouldn’t In Europe
While you’ll never hear Tesla head honcho Elon Musk describe the Cybertruck as anything other than a raging success, lower-than-expected sales are hurting suppliers.
One notable casualty is L&F Co., a South Korean battery material supplier, which recently disclosed that its supply contract with Tesla had been cut by 99 percent, a shift attributed in part to sluggish demand for the truck.
A Contract Cut to the Bone
Back in February 2023, L&F had secured a sizable deal worth 3.83 trillion won (roughly $2.67 billion) to provide Tesla with high-nickel cathode material intended for the Cybertruck’s batteries. But that agreement has now been trimmed down to a token 9.73 million won, or about $6,776 at current exchange rates.
The original contract was tied to Tesla’s 4680 battery cells, which were first revealed in 2020. At the time, Tesla presented them as a major leap forward, central to its plan to rapidly expand production and eventually launch a $25,000 EV. That model has yet to materialize, and so far, the 4680 cells are used primarily in the Cybertruck.
According to an unnamed source with knowledge of the supply contract, L&F only needed to supply contract with small amounts of material as the development of the Cybertruck was repeatedly postponed. Bloomberg reports that policy and economic issues also affected the contract, including the elimination of subsidies through the Inflation Reduction Act.
SpaceX to the Rescue?
As Tesla continues to struggle with sluggish Cybertruck sales, a familiar buyer has entered the picture. According to a recent report, SpaceX has already purchased more than 1,000 Cybertrucks from Tesla, and that number could eventually climb to 2,000.
SpaceX hasn’t said why it’s buying so many Cybertrucks, but it likely has more to do with surplus stock than necessity. Either way, the move points to just how closely Musk’s companies operate, and hints that Tesla may be offloading inventory through its own back door.