Tesla’s Cybertruck Design Faces Uphill Challenge for Pickup Buyers

November 25, 2019 by John O'Dell

Tesla’s planned “Cybertruck” will be polarizing because of its looks and isn’t likely to cut into Detroit’s dominance of the pickup truck market, auto industry analysts told Trucks.com.

“It will likely thrill enthusiasts, but I don’t see it selling as well” as Tesla’s own Model 3 sedan or its upcoming Model Y crossover, said Michael Ramsey, an automotive analyst with Gartner Inc.

Tesla appears to be targeting an audience “that goes for different values, images and preferences than the traditional truck buyer. But how many such buyers are there out there,” asked Antti Lindstrom, a truck industry analyst at IHS Markit. He noted that several startups seem to be going after the same tech-loving, mainstream-avoiding customer base with their electric pickups.

Tesla has satisfied the first tier of enthusiasts, he said, and now “needs to broaden its market to continue growing and bringing cash in.”

SIGH OF RELIEF

During the buildup to the Cybertruck reveal, investors in the traditional Detroit automakers feared it would the electric vehicle would eat into the most profitable segment of the U.S. auto industry.

The automakers dependent on pickup truck sales “can breathe a sigh of relief,” said Brian Johnson of Barclays.

“While investors had feared a category killer, the futuristic sci-fi movie-like truck was not that. While the design and ‘armored’ features may actually expand the market by drawing in younger drivers who are gaming and sci-fi fans, these are buyers who are not likely to have been in the market for a King Ranch or Ram HD,” Johnson said.

The styling just isn’t likely to capture the interest of roughly 3 million consumers and businesses that purchase new pickup trucks annually in the U.S. Truck buyers like their vehicles to imitate the high ride height and long hoods of a semi-tractor. The industry calls it, “Peterbilt-style.”

CYBERTRUCK FEATURES

Musk showed a truck with a monoplane design that uses an exoskeleton made of thick, ultra-hard stainless steel for structures at last week’s unveiling near Tesla’s design studio in Southern California, That’s vastly different than the traditional body-on-frame design of other U.S. pickups, Johnson said.

Other features include adaptive air suspension with adjustable ride height, a maximum of 16-inch ground clearance and a 0-60 mph acceleration time of just under 6.5 seconds for the base model.

The interior has Tesla’s giant 17-inch touchscreen and seating for six.

PRICE POINT

“Tesla pricing starts at $39,900 – but we, of course, point out the Model 3 only briefly sold a variant at that price point,” Johnson said.

The average starting price for a full-size pickup truck is around $30,000, which is about $10,000 less than the Cybertruck’s starting price. But they typically sell for far more. The average transaction price of a full-size pickup is approximately $45,000, according to automotive research firm J.D. Power.

Rivian’s R1T electric truck is expected to start around $69,000 when it goes on sale in late 2020.

NICHE PLAY

The Cybertruck might work as a niche-market play, and that wouldn’t strain Tesla’s already limited capacity, Lindstrom said. “But if it is intended to be a mass-market product, then Tesla sure needs to ramp up its manufacturing processes,” and that’s a costly undertaking, he said.

There’s likely going to be a significant cultural divide between traditional tech-oriented Tesla buyers and the consumers who most frequently purchase trucks, the analysts said.

BUCKING LOYALTY

Truck buyers also are extremely loyal and expect a high degree of durability and “it’s not at all clear that Tesla has a proven capability in that respect,” said Sam Abuelsamid, an auto analyst at Navigant Research.

“If you look at where consumers buy a lot of trucks, places like Texas and the Midwest, it’s often markets that haven’t had huge EV adoption, so it’s not at all clear how much demand there is for electric pickups,” he said.

When a truck is used as a truck instead of a substitute for the family sedan, the range also may be an issue.

“So far, we also haven’t seen how well the range is going to hold up when using a truck as a truck. Based on results of towing with the Model X, anyone pulling a big boat or horse trailer with an electric truck may find themselves very range challenged,” Abuelsamid said.

COMPETITION

Tesla also faces stiff competition in the nascent electric truck market.

That includes the expected late 2020 launches for Ford’s electric F-150 and electric pickups by two startups. Rivian, with $1 billion in financing from backers including Ford and Amazon, has a sporty adventure pickup in development. Lordstown Motors is updating the never-built Workhorse W-15 electric truck as the Lordstown Endurance.

Tesla’s Cybertruck will launch in 2021, along with electric pickups from General Motors and startup Bollinger Motors. Bollinger claims to have the most robust and most off-road capable truck of them all.

“It is not going to be anywhere near as easy for Tesla to grab market [with the pickup] as it was with the Model 3,” Abuelsamid said.

Eileen Falkenberg-Hull August 21, 2019
Electric vehicle start up Rivian is close to bringing R1T pickup truck to market.

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