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Tesla’s Cybertruck Reservations: A Closer Look

IFM_ Tesla's Cybertruck
Six years ago, at a Tesla design meeting, Elon Musk projected a picture of a Ford truck and complained that the car was Yawnville

Four years ago, Tesla introduced its Cybertruck, which experts initially believed would be a failure. However, the truck turned out to be successful. The question remains whether Elon Musk can replicate his earlier success with the launch of the stainless steel Cybertruck.

Recently, Cybertruck Delivery Event confirmed that Tesla’s Texan Gigafactory is finally now slowly spitting out Cybertrucks, after the official unveiling—when design chief Franz von Holzhausen famously shattered the prototype’s Armor Glass with the spirited throw of a metal ball. This electric pickup inspired by Blade Runner has an estimated 2 million pre-orders from self-described “reservationists,” which could make the richest man in the world even wealthier than he already is. At a newly inflated $61,000 price tag—up $21,000 from what was promised four years ago—that’s revenue of more than $65 billion if half of those $100 refundable deposits add up.

During an interaction with WIRED, Boston University Questrom School of Business professor Tim Simcoe said, “Just 15% of those preorders would equal the annual US truck sales of Toyota. But Tesla faces the challenges of scaling up production and achieving a sufficient flow of paying customers.”

During Tesla’s Investor Day on March 1, Musk stated that the Cybertruck’s demand was ‘so far off the hook, you can’t even see the hook.’ Landing even 15% of the reservationists seems optimistic, though, given the Cybertruck’s delays and lack of global availability (it won’t be available for purchase outside of the US, Canada, and Mexico for some time) and its apparent incompatibility with Australian and European safety standards.

It’s important to note that the recent price increase will likely lead to a decrease in demand. During the launch, around ten customers purchased vehicles that cost $21,000 more than the base model price of $39,900 that was promised back in November 2019. These vehicles are believed to be unique prototypes rather than actual retail models, and they will remain connected to Tesla for some time. It’s worth noting that the market has changed significantly since then, with many competitors now offering more traditional and established products.

Ford sneaked ahead of the competition, with its $49,000 F-150 Lightning, the battery-powered variant of the truck that has dominated the pickup market for decades. Stellantis is preparing its $58,000 RAM 1500 REV, and GM will soon launch its $52,000 electric Chevy Silverado. Experts suggest that those who are bold and want to stand out can purchase Rivian’s $73,000 R1T e-candy truck.

After driving a pickup for 30 years, Coleson Bruce, an F-150 Lightning owner, is contemplating a switch from Ford to Tesla, having reserved a Cybertruck the day after its original reveal, and despite not being among the earliest in line, he sees a potential advantage in being in Austin.

“Historically, Tesla’s new product deliveries have often been weighted toward favoured geographies rather than first-come-first-serve. Before my order is placed, the car will have had time, independent reviews, and improvements made; at that point, I’ll be better equipped to weigh the costs and benefits,” Bruce said.

Not for traditional truckers

Only a small percentage of the 2 million pickup trucks that Americans purchase each year—at an average price of $59,000—are currently all-electric. Ford predicted a year ago that it would sell 150,000 Lightnings. Even after a smooth ramp through 2024, many analysts mock Musk’s projected 250,000 annual Cybertruck sales.

Gartner automotive analyst Mike Ramsey said, “If Tesla can build and sell 50,000 a year, it has to be deemed something of a success. The Cybertruck is outlandish and outrageous but also weirdly cool.”

Ed Kim of the specialist market research firm AutoPacific mentioned that the Cyber Truck is likely to prioritise form over function for many tasks expected by American pickup customers, and he expressed the expectation of minimal cross-shopping between Cybertruck and traditional pickup trucks in the US market.

“The pickup is an American institution, and it makes perfect sense for Tesla to go get a piece of that market. Still, the Cybertruck seems more like a love letter to Tesla’s fanboys than a serious attempt at disrupting the truck market. Pickups are all about function, even to the many casual truck owners in America who don’t do ‘truck things’ with their vehicles,” Kim noted.

There will likely be fewer Cybertruck buyers if extroverts are the primary attraction rather than traditional pickup buyers. Tesla may be able to meet this smaller demand, even if it comes at a significant and unrecoverable cost in R&D. Musk hinted at the possibility of production issues during a recent earnings call.

With the Cybertruck, ‘we have dug our own grave,’ the billionaire businessman cautioned, citing enormous challenges in getting to volume production. Musk projected that, in an optimistic state of mind, Tesla’s best product ever would take 12 to 18 months to be a significant positive contributor to cash flow.

With its stainless steel body panels and unique construction, the Cybertruck is a highly expensive product by nature, according to Kim.

Professor of entrepreneurial studies at UCLA Anderson School of Management Olav Sorenson concurs with Kim’s opinion.

He claims that Tesla has made significant R&D investments in Cybertruck. It’s also possible that the company has been spending a lot more time developing the machinery and procedures needed to produce it on a large scale. Therefore, the amount of money they end up making on the car will depend on how many units they sell. Demand will be tempered by higher-than-expected prices, Simcoe cautions. A higher price will undoubtedly result in fewer sales because demand curves naturally slope downward. In the case of electric trucks, the fundamental economics that Henry Ford discovered—that greater volume equals lower cost—remains true.

A Frankenstein DeLorean?

According to AutoPacific’s Kim, selling 250,000 Cybertrucks will be a tough challenge if Tesla is unable to produce enough of the vehicles to meet Musk’s expectations or if serious issues with the first batch of trucks are widely publicised.

Kim also questions whether there are really that many people who would want to drive such an extroverted vehicle. Mass-produced cars are generally far more appealing to the general public.

The breakeven point for Tesla cannot be determined, but according to Sorenson, even a traditional car might need 200,000 units per year to cover the design costs. This means that the initial costs of Cybertruck’s ground-breaking manufacturing could necessitate as many as 300,000 sales annually.

“Sell many fewer, and Cybertruck will be an almighty flop. If so, this won’t come as a surprise to industry insiders. Toy industry insiders, that is. Lego reacted to Cybertruck’s 2019 launch by tweeting a picture of a single plastic brick on wheels, riffing that the evolution of the truck is here,” Sorenson said.

British auto designer Adrian Clarke put the Cybertruck as a low polygon joke that only exists in the fever dreams of Tesla fans who stand high on the smell of Elon Musk’s flatulence. The Cybertruck is continuously called out on social media for looking like a Frankenstein DeLorean or a four-year-old’s car drawing.

After witnessing Holzhausen park a pre-production model at a Malibu auto event, auto journalist Daniel Golson told Jalopnik he was “baffled” by the car’s poor construction.

He said, “I’ve been around hundreds of prototype cars in my career, ranging from early test mules to near-production prototypes, and I’ve never seen an automaker proudly present something of this poor quality, especially not this late in development.”

At a recent event, a standard car promo video was shown, showcasing the $100,000 highest-performance variant. However, there were no close-ups of the product. The other low point of the event was a terrified Holzhausen, the former design director of Mazda North America, soft-throwing a baseball that managed to avoid breaking the side window of the Cybertruck. Musk was speaking from a bed in the Cybertruck, his face obscured by darkness.

On the delivery event video, a chyron demanded that “the future should look like the future.” The Cybertruck isn’t as futuristic as is typically depicted. It’s partly based on Italian concept cars of the late 1960s and early 1970s, as evidenced by a photo tweeted by Musk’s authorised biographer Walter Isaacson. In the image, Musk, Holzhausen, and an unidentified man are seen standing in front of mood boards that are scattered with old photos of “wedge cars,” which are said to resemble the Cybertruck, in addition to screenshots of RoboCop and Tron. The 1968 Alfa Romeo Carabo and the 1970 Pininfarina/Paolo Martin-designed Ferrari 512S Modulo, which confused many at the 1970 Geneva Motor Show, were examples of angular automobiles.

Automobile enthusiasts adored these legendary vehicles. Nevertheless, there were good business reasons they never made it to retail: they would have been extremely challenging to make, and not enough would have been sold to cover the costs of development and production. Their design elements later found their way into the Lotus Esprit and the DMC DeLorean. These were modestly priced items. Only 10,675 Espirits, manufactured in England between 1976 and 2004, were sold. Before John DeLorean’s once-vibrant company went bankrupt in the early 1980s, even fewer gull-wing-doored DeLoresans were sold.

Though they may have had little sales, Musk and Tesla’s design team were nevertheless influenced by these wedge-shaped vehicles in film adaptations. According to Musk, one of his design touchpoints was the Lotus Esprit 1 Series submarine driven by James Bond in The Spy Who Loved Me. In addition, it’s worth noting that another touchpoint with Musk involves the DMC DeLorean, which served as the time machine in the Back to the Future movies.

Six years ago, at a Tesla design meeting, according to Isaacson, Musk projected a picture of a Ford truck and complained that the car was Yawnville.

“Everyone is pushing back on him at this meeting, and he puts up things from movies, from sci-fi, from video games,” Isaacson stated in a July podcast interview.

Finally, Musk mentioned that they will be executing the plan, emphasising the addition of some edge. According to reservationist Bruce, a Lightning driver, he expressed the view that the edginess of a Cybertruck surpasses the bland appearance of a Ford F-150. Despite not meaning it, Bruce pointed out that Ford markets it as the best-looking truck, intended to be boring for the fat portion of the bell curve and not meant to be divisive.

Disliked as “Space Karen” on the social media network where he appears to be losing ground, Musk has stated that the Cybertruck’s design accounts for Martian life and is prepared for deployment when he succeeds in building his intended colony there.

A drone image of a Cybertruck floating through red sand was a colour-coded nod to this vision in the presentation. The British adventure-techwear brand Vollebak is another company courting potential Mars colonists. It claims to make clothing that feels like you’re buying from the future by utilising cutting-edge fabrics and fillings.

“Our Mars Jacket has a 3D-printed vomit pocket with a bright orange sick bag. You might call it provocative, but for us, it isn’t—it’s experimental. Vollebak is a niche brand, however, and marketing a postapocalyptic future as somehow desirable is far from mainstream,” the company cofounder Steve Tidball stated earlier this year.

Where are the copycats?

Experts say, the best indicator of whether Musk is onto something, are that he will defy his detractors and make billions from his revolutionary pickup, maybe the number of design knockoffs. But no automaker has produced a Cybertruck clone in the four years since its introduction. Of course, they could all be mistaken, and Musk will undoubtedly laugh himself to tears, but the driving force behind Tesla’s revolutionary success was its drivetrain, not its design. Tesla now requires a fresh dose of innovation. Its current lineup of four vehicles is outdated. The Model 3 sedan is dangerously antediluvian in the car world, having been released in 2017. In contrast, the Model Y crossover is only three years old.

“Right now, the EV to own is a (Porsche) Taycan or a Mercedes EQS. 100 per cent. There’s no cachet in a Tesla among the wealthy,” automotive consultant Eric Noble of the CARLAB told Forbes.

“S&P Global Mobility has reported on Tesla’s shrinking dominance in the US EV market. Given that consumer choice and consumer interest in EVs are growing, Tesla’s ability to retain a dominant market share will be challenged going forward,” S&P’s report concluded.

“Musk is a polarising figure with many fans, but a growing number of people are disillusioned with him. Some liberals, who had been a lot of the early adopters of Tesla cars, have sworn not to buy another. Interestingly, however, his appeal to conservatives—not the usual buyers of EVs—has grown. That might help sales of the Cybertruck, since conservatives more frequently buy pickups and SUVs,” AutoPacific’s Kim said.

“Conservatives are not buying gas-powered vehicles just to irritate liberals. All kinds of people buy these vehicles because they are useful, and as electric trucks—including Cybertruck—start providing better performance at competitive prices, we will see adoption among all demographics,” Kim added.

Dialling down eco attitude

Before taking the helm as CEO, Musk unveiled his vision for Tesla in a 2006 manifesto: affordable family cars would eventually replace the pricey premium models to clean up the air. After seventeen years, the Cybertruck has become the company’s flagship vehicle, while the affordable family car is still on the horizon (it’s thought to arrive soon, but then, Tesla’s pie-in-the-sky promises are always true). The allusions to the advantages for the environment are gone.

“Progressives and environmentalists are unlikely to be lining up for the Cybertruck. On top of its gargantuan size and weight, it is not all that useful as a truck. This is a status symbol and attention-getter. While Tesla has been a key driver of vehicle electrification, the Cybertruck is big, heavy, and, relatively speaking, a very inefficient use of the finite resources available to decarbonise transport,” biochemist and journalist Simon Evans said en route to the COP28 climate conference in Dubai.

“Yes, it’s electric, and yes, it can run on renewable power—but it’s pretty much the opposite of energy and material efficiency. A Cybertruck will have much lower lifecycle emissions than an equivalent combustion-engine model. But if everyone on the planet ends up driving a Cybertruck—or something similar—it’s going to be far more challenging to decarbonise transport at the pace and scale needed to stay below 1.5 degrees Celsius,” he concluded.

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