Tesla Inc. is reportedly exploring the development of a smaller, all-electric pickup truck, a strategic pivot signaling a re-evaluation of its electric vehicle lineup following the Cybertruck's failure to meet ambitious sales targets. The move comes as the broader electric vehicle market faces headwinds and Tesla seeks new avenues for growth, particularly in the context of its burgeoning autonomy initiatives.

Lars Moravy, Tesla’s Vice President of Vehicle Engineering, revealed the company’s ongoing consideration of a compact truck during an investor event in California on Saturday. Moravy indicated that discussions around a smaller pickup have gained momentum, especially as Tesla envisions a future where its autonomous vehicle technology, including robotaxis, could extend beyond human transport to encompass the delivery of goods. “We always talked about making a smaller pickup,” Moravy stated. “I think in the future, as more and more of the robotaxi comes into the world, we look at those options and we think about, OK, that kind of service is useful not just for people, but also for goods. We’ve definitely been churning in the design studio about what we might do to serve that need for sure.”

The potential shift underscores the significant gap between the Cybertruck’s initial projections and its actual market performance. Tesla had aimed to produce 250,000 Cybertrucks annually by mid-2025, with CEO Elon Musk at one point suggesting a target of up to half a million units per year. However, current sales figures are reportedly only about a tenth of the 250,000 annual rate. While the Cybertruck has, at times, outsold competitors like the Ford F-150 Lightning in specific periods, its overall market penetration remains limited, largely appealing to early adopters and brand enthusiasts rather than achieving the mass-market appeal of traditional full-size pickups from Ford, Chevrolet, and Ram.

Industry analysts suggest the Cybertruck has struggled to transition from a novelty product to a utilitarian vehicle, particularly as competitors like Rivian have refined their electric truck offerings. A smaller, potentially autonomous, truck could offer Tesla a more sustainable and versatile business proposition, addressing urban logistics and last-mile delivery needs. This strategic re-evaluation highlights Tesla's imperative to diversify its product portfolio and adapt to evolving market demands and technological advancements in autonomous driving.