Tesla selects European steel supplier Outokumpu Oyj from Finland as a source for stainless steel panels for its upcoming Cybertruck. Outokumpu has made adjustments to accommodate the unconventional design of the electric vehicle, according to insiders. The materials will be shipped to Tesla’s assembly factory in Austin and this marks a significant shift in product for Outokumpu, which is Europe’s largest producer of stainless steel and is well known for its work with automakers on exhaust systems. While the specific plant and number of suppliers involved are not confirmed, it is possible that the materials are being sourced from Outokumpu’s plant in Alabama. Outokumpu declined to comment on the matter while Tesla did not respond to requests for comment.
Following the Bloomberg News report about Outokumpu being a supplier, the company’s depositary receipts rose as much as 49% to $3 a share in New York. However, trading volumes for these receipts remain low.
The Long Awaited Release Date
The Cybertruck is set to be released later this year, has drawn attention for its use of stainless steel panels. This material, typically can be significantly more expensive than regular steel and is more difficult to shape into body panels. Musk has previously claimed that the stainless steel exterior is “bulletproof.” Investors are expecting an update on the production during an October 18 conference call.
Unlike other trucks from major car makers, the Cybertruck stands out with its stainless steel finish. Most trucks in the market use commodity grades of high strength steel. Ford Motor Co.’s F-150, for example, features body panels made of aluminum affixed on a steel frame. Musk, an advocate for stainless steel, as it gives a distinctive Blade Runner like appearance and eliminates the need for paint.
However, Tesla’s unique approach to building the Cybertruck has resulted in a significant delay. Musk has commented on social media that the truck was challenging to design and even tougher to build, mentioning that the company is navigating uncharted territory due to the vehicle’s unconventional nature.
Making the Box Out-of-the-Box
Usage of stainless steel has not been common since the 1980s when the gull winged DMC DeLorean was introduced. This car became iconic in the “Back to the Future” film series. However, production issues and quality control problems led to the demise of that vehicle.
It is possible that Tesla is using a more advanced and high-tech stainless steel for the Cybertruck. The company has filed a patent for an “ultra hard cold worked steel alloy” designed for improved hardness and corrosion resistance, specifically for high performance automotive applications.
Prototypes of the Cybertruck geared towards the mass market have been spotted in testing in the USA. Tesla has indicated that a handover event for paying customers will take place before the end of 2023. During a July earnings call, Tesla reassured investors that it remains on track for initial deliveries this year. The Cybertruck enters a market that includes the Ford’s F-150 and Rivian Automotive Inc.’s R1T. However, the deliveries of these rival vehicles have been less impressive than anticipated.
Using stainless steel is uncommon in car production, however, it’s not expected to have an impact on the steel industry. Car makers have always been one of the largest consumers of steel in terms of raw volume. A typical North American vehicle contains about a ton of steel per car produced. Even if Tesla sells a large number of Cybertrucks, it would still represent only a small fraction of the 2 million tons of steel produced yearly in the US.
Outokumpu mainly supplies stainless steel for bridges, railways, and various home appliances including washing machines and refrigerators.
As Tesla selects European Steel for their Cybertruck, we eagerly await the first production models of this long awaited Truck.