Tesla’s Cybertruck pickup truck has a higher-than-expected price and a far lower range than CEO Elon Musk promised, deeply disappointing some but also enthralling others with its futuristic, SUV-like feel.
The Cybertruck entered the popular pickup truck market two years later than originally planned, competing against the likes of Ford’s F150 Lightning, Rivian Automotive’s R1T and General Motors’ Hummer EV.
Reddit co-founder Alexis Ohanian, one of the first dozen customers to pick up his order Thursday, said the Cybertruck feels like Tesla’s Model X sport utility vehicle to drive.
Ohanian live-streamed his first drive of the Cybertruck on social media platform
The Cybertruck starts at $60,990 (roughly Rs. 51 lakh), which is more than 50% more expensive than the price touted by CEO Elon Musk in 2019. That might narrow the car’s appeal. Tesla shares have fallen more than 2% since before the release.
That disappointed Christian Cook, a Texas-based financial services executive who ordered a Cybertruck in 2019 after Musk promised a cheaper pickup truck that could travel further on a charge.
Cook, who drives a Model 3, told Reuters he made certain financial decisions based on his plans to buy the Cybertruck. “My respect for Musk has taken a huge hit. My loyalty to Tesla has taken a huge hit.”
CFRA analyst Garrett Nelson said the high prices will cause customers to cancel reservations and expected Tesla to adjust pricing based on future demand.
Analysts and brand experts say the Cybertruck, made of shiny bulletproof stainless steel and inspired by the car-turned-submarines in James Bond movies, could boost Tesla’s brand image, which has been weakened by steep price cuts to boost demand.
“The Cybertruck is getting a lot of attention. It puts Tesla back in the spotlight,” said Spencer Imel, a partner at consumer insights firm Langston.
“But we don’t think it will help Tesla become a mass-market brand and compete with brands like Ford that serve the everyday car buyer,” he said.
Indeed, the price of electric pickups and the long wait for significant financial returns have analysts worried.
Musk’s personal ability to build the Tesla brand also came into question this week after he cursed advertisers who left his X social media platform, formerly known as Twitter, over anti-Semitic content during a live interview.
That makes investors and some consumers nervous and could be a drag on Tesla’s appeal, said Allen Adamson, co-founder of branding and marketing consultancy Metaforce.
JP Kuehlwein, an adjunct professor of marketing at Columbia University Business School, said, “Many early adopters of Tesla held out hope for the dream of a sustainable future, but they were rudely awakened by some of the “weird things” Tesla did, and for some, he went from being a “rebel” to a “misguided person.”
Analysts say the Cybertruck won’t have much of an impact on Tesla’s finances next year. Bernstein expects deliveries of 250 vehicles this year and 75,000 next year, saying both are “probably ambitious.”
Musk said Tesla’s Cybertruck production could reach about 250,000 vehicles per year by 2025.
The company has repeatedly warned that it will face significant challenges in scaling its products and achieving positive free cash flow, which may not happen until mid-2025, which could negatively impact profitability.
The brand refresh is crucial for Tesla, especially as the company contends with weak demand for electric vehicles and increased competition.
Bernstein analysts added: “Tesla has a product problem where older product lines are not meeting sufficient market demand and may not launch new mass-market products until late 2025.”
© Thomson Reuters 2023
