If you followed Tesla CEO Elon Musk's Twitter account this past weekend, you know that his company's new Cybertruck pickup truck was a major topic of conversation. Chief among his concerns was the Cybertruck's early popularity. But what he left out of that conversation is perhaps what matters most.
Over the weekend, Musk posted several tweets saying how many preorders his company's Cybertruck had attracted since its unveiling last Thursday. On Saturday, he touted its 146,000 preorders and added that 42 percent of prospects ordered the dual-motor version, another 41 percent chose the tri-motor offering, and the remaining 17 percent went with the single motor version.
Those preorders came "With no advertising and no paid endorsement," according to Musk's tweet.
But he wasn't done. He followed that up with a tweet on Sunday that said preorders had reached the 187,000 unit mark. Several hours later, he said preorders had reached 200,000 units.
Hitting such a milestone is a potential cash cow for Tesla. At a starting price of $39,900, but with most people going with the more expensive dual- and tri-motor versions that start at $49,900 and $69,000, respectively, the early orders alone could translate to billions in revenue for Tesla.
Of course, such figures would excite shareholders and industry watchers. But they also fail to provide much-needed context -- and perhaps a fair share of skepticism.
What Musk didn't say in his tweets was that those preorders mean very little in the grand scheme of things. Yes, they indicate interest in his company's new Cybertruck, but they shouldn't be misconstrued as actual sales. Moreover, I'd argue that they shouldn't even be misconstrued as expected sales. In truth, they're little more than indications of interest.
The reason for that is simple: preordering a Cybertruck takes little risk. All you need to do is go to the Cybertruck website, choose a model you're interested in, and plunk down $100. More importantly, that $100 is fully refundable at any time. So, if you decide in a week, a month, or a year that you simply don't want a Cybertruck, Tesla will gladly refund your cash.
We should also acknowledge the impact of time. Cybertruck is fun and exciting now, but production is still a couple of years away. And if you preordered the tri-motor version, production is three years away. A lot can happen between now and then. Cybertruck could be redesigned, it could hit snags, Tesla could delay it even further. All of those things could negatively impact these pre-order figures.
In some respects, Cybertruck preorders right now are little more than conversation pieces at the Thanksgiving dinner table. Those who like to be at the cutting edge can tell their friends and family they're among the first to preorder the new Cybertruck and extol its virtues. They can do it again next Thanksgiving, too.
Whether the Cybertruck will actually end up in their driveways, however, is a different story altogether.
Now, this isn't to say that what Tesla has done with Cybertruck isn't impressive. The company has designed what I think is a truly good-looking pickup truck and get people excited about it, even though it's still years away. And the early preorders do suggest that Tesla may be onto something. Indeed, if the company can get it right, there's a real chance Cybertruck could be a market leader in pickups.
But there's plenty of time between now and then. And it's important to keep that in mind before we get too excited about preorders that, right now, tell us very little about how the Cybertruck will eventually turn out.