And as a bonus, they need more space to build more Cybercabs, and they can reallocate staff to that line, where margins are likely to be much higher.

That's what he said, but I don't believe him. The Cybercab line has a reported capacity of 125,000 units per year. Since production started eight months ago, they've built an estimated 7-800 units, something like that. Most of those have never entered service. And most of those have seen only light duty, an average of 3.8 trips per vehicle, according to robotaxitracker.com. Not per vehicle per day, per vehicle total. They don't need more capacity, and they won't for a long time.

Logically, their plan is to scale up to where they are adding multiple vehicles to multiple cities every day. But they are a long way from being able to do that. Besides the technical challenges, there are significant regulatory and logistical hurdles as well. Service areas need to be geomapped, remote operators need to be hired, service depots need to be constructed/obtained, etc. Ride hailing permitting in general is complex, and AV ride hailing adds complexity on of of that. They are not constrained by lack of vehicles, and it will be a long time before they are.

And even then, why not just expand the existing Cybercab line? Musk's answer is that Tesla doesn't have the talent to build two vehicles at the same time. I don't believe that either. I can see lacking the talent to develop two vehicles at the same time, but lots of companies build 10-20 models at the same time, with margins similar to Tesla's.

The simplest explanation is usually the best: Tesla misread the market. Just like everyone else who tried to make a full size pickup EV.