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The Cybertruck range extender is a brilliant solution to the tax credit, and a possible preview of the future of EVs

December 1, 2023

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The most curious part of the Tesla Cybertruck launch was what was missing. Tesla didn't mention the Cybertruck range extender during the presentation, but it's clearly shown on the product page with a call-out. And it has a huge impact on range, boosting it by nearly 40% on the top and mid models.

Tesla Cybertruck With vs. Without Range Extender

Trim Base Price Range Range w/ Extender
Tesla Cybertruck Cyberbeast $99,990 320 440+
Tesla Cybertruck AWD $79,990 (-$7,500 tax credit) 340 470+
Tesla Cybertruck RWD $60,990 (-$7,500 tax credit) 250 N/A

Tesla has been (fairly) knocked for how the Cybertruck stacks up against the Rivian R1T in a head-to-head spec comparison. One of the biggest differences is that Rivian offers 3 different battery packs across the full lineup of R1Ts, leading to a top-of-the-pack range of 410 miles. Tesla's approach is different, with the Cybertruck only getting up to 340 miles in the longest-range trim. The Tesla range extender battery is a separate post-purchase optional installation. It sits in the Cybertruck bed and subtracts from storage space. We have two theories for why Tesla is going this route.

(1) Tesla is saving buyers $7,500 by skating right under the tax credit price limit

Tesla has a history of bending and twisting their offerings to allow consumers the maximum tax benefit for purchasing a Tesla, and this is no different. The current tax credit rules ⓘ have a hard price cap. If a truck or SUV costs over $80,000, it doesn't qualify. You need to dig into the word "costs" here to understand Tesla's strategy. The exact language from the IRS says "The MSRP is the base retail price suggested by the manufacturer, plus the retail price suggested by the manufacturer for each accessory or item of optional equipment physically attached to the vehicle at the time of delivery to the dealer."

See what Tesla is doing here? Because the extended range battery is not offered as an option during configuration, but rather only as a post-delivery installation, it isn't factored into the price cap. The Cybertruck AWD comes in at $10 short of the limit and consequently saves buyers $7,500. Brilliant solution.

(2) Are battery rentals the future of EV range extension?

A more interesting possibility is that Tesla is experimenting with a radically different approach to long-range EVs. Most people most of the time aren't driving long distances. What if Tesla let you rent an extended range battery pack for a weekend, get it installed on Friday afternoon and return it Monday morning? Who wants to pay tens of thousands more for a huge battery if you could rent it for a few hundred only when you need it? And the environmental benefits of lighter cars and smaller battery packs would be huge. Time will tell whether the range extender is a permanent or removable installation, but the possibilities are exciting.

Lastly, we have to consider a few simpler explanations, e.g. that the additional separate battery pack is simply a production optimization. Maybe Tesla just wants to prioritize delivering more Cybertrucks over delivering fewer Cybertrucks with larger batteries. Allocating fewer kWh per truck would help. Or maybe the range extender was a late-game addition, and this was the only way to make it work.

Regardless, the big thing we want to know is pricing and availability. How much will the pack cost? How will installation work? And how soon can the lucky first Cybertruck owners get their hands on one?

Images in this story courtesy of Tesla, Inc.

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