Musk says Tesla on the hook for Cybertruck deposits after cancellation

Tesla ( TSLA ) will have to refund some buyers a deposit placed on Cybertrucks. This comes as the company was sitting on a significant amount of unsold supply only last year.

In a post made early Monday morning, CEO Elon Musk wrote, "Cybertruck order rate far exceeds our production rate. We will try to make as many as possible before shutting down the line in about 8 months, but will have to return deposits for a lot of people."

The news comes after Musk announced late last week that Cybertruck production would end in the middle of next year in order to focus on Cybercab - Tesla's robotaxi - production.

For many in the industry, ending Cybertruck production wasn't a surprise. Musk once boasted that Cybertruck demand was " so far off the hook, you can't even see the hook ," and the company said it had over 1 million preorders.

But conversion to sales never materialized. Cox Automotive's Kelley Blue Book estimated overall sales for the controversial pickup only hit around 71,000 since the vehicle went on sale in 2023. Tesla and Musk had built out capacity at Giga Austin to produce 250,000 Cybertrucks per year; Tesla was selling about one-tenth that amount.

The curious part is why a backlog exists for a product that seemingly didn't sell well, with unsold Cybertrucks stuffing parking lots and Tesla cutting back on shifts for the Cybertruck.

It's possible that after Tesla cut back on supply so severely over the last few months, new orders started piling up when news broke that the Cybertruck would be canceled.

Per Tesla's website, orders for either the Premium All-Wheel Drive ($92,490) or Cyberbeast ($102,490) have a delivery window of January 2027 to March 2027. It is unclear how many deposits Tesla would have to refund if it cannot meet its backlog - though each customer deposit is $1,000.

In his post today, Musk did not address Cybertruck's poor sales, but he did say the controversial truck made money. "This is not a case of Cybertruck being unprofitable, as has been misreported by legacy media, but rather that the opportunity cost of the complexity of Cybertruck is vastly outweighed by the value of incremental Cybercab production," he said in his Monday morning post.

Cutting a product after only four years of sales - at least in the auto industry - means it was not in high demand. Betting on the Cybercab in lieu of the Cybertruck may be the right long-term call, but also gives Musk an excuse to sunset his triangle-shaped pickup.

Pras Subramanian is the lead auto reporter for Yahoo Finance. You can follow him on X and on Instagram .