Tesla's Cybertruck feels like an SUV; price, lower driving range upset
some
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[December 02, 2023] By
Abhirup Roy, Hyunjoo Jin and Chavi Mehta
SAN FRANCISCO (Reuters) -Tesla's pricier-than-expected Cybertruck
pickup, which offers driving ranges that fell well short of what CEO
Elon Musk had promised, has deeply disappointed some but fascinated
others with its futuristic, SUV-like feel.
The Cybertruck, two years behind schedule, enters a hot pickup truck
market to compete with the likes of Ford's F150 Lightning, Rivian
Automotive's R1T and General Motors' Hummer EV.
Reddit co-founder Alexis Ohanian, who was among the first dozen
customers to pick up the vehicle on Thursday, said the Cybertruck drives
and feels like Tesla's Model X sport utility vehicle.
"Initial feeling about this vehicle - smooth, drives a lot like my Model
X. It is big but not unwieldy," Ohanian said as he live-streamed his
first drive of the Cybertruck on social media platform X. He said he'd
be the "coolest dad" picking up his kid at school.
Starting at $60,990, the Cybertruck is over 50% more expensive than what
CEO Elon Musk had touted in 2019. That may narrow the appeal of the
vehicle. Tesla's stock is down over 2% since before the launch.
Among those disappointed is Texas-based financial services executive
Christian Cook, who had booked a Cybertruck in 2019 after Musk promised
a cheaper pickup that travels farther on a single charge.
"The truck pricing and range is a huge let down," Cook, who drives a
Model 3 and told Reuters he had made certain financial decisions based
on his plans to buy a 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 steep price tag will lead to
customers cancelling reservations and expects Tesla to adjust the
pricing based on demand going ahead.
The Cybertruck, made of shiny, bullet-proof stainless steel and inspired
from a car-turned-submarine from a James Bond movie, is likely to uplift
Tesla's brand that has been dented from steep price cuts to boost
demand, according to analysts and branding experts.
"The Cybertruck gets a lot of attention. It brings Tesla back top of
mind," said Spencer Imel, a partner at consumer insights firm Langston.
"But we don't see it helping Tesla gain ground in terms of becoming a
mass market brand and competing with brands like Ford that are serving
the everyday car buyer," he said.
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Tesla's new Cybertruck is shown on display at a Tesla store in San
Diego, California, U.S., November 20, 2023. REUTERS/Mike Blake/File
Photo
Indeed, the electric pickup's price and longer wait time for
significant financial payoff left analysts concerned.
Musk's personal ability to build the Tesla brand has also been
questioned this week after a live interview in which he cursed out
advertisers who left his X social media platform, formerly known as
Twitter, over antisemitic material.
That was creating nervousness among investors and some consumers and
could be drag on Tesla's appeal, said Allen Adamson, co-founder of
brand and marketing consultancy Metaforce.
"Many of Tesla's early adopters who bought into the dream of a
sustainable future are being kind of rudely woken up," by some of
the "strange things" he has done, turning him from a "rebel" into a
"misguided person" for some people, said JP Kuehlwein, an adjunct
professor of marketing at Columbia University Business School.
Cybertruck will not do much for Tesla's financials next year,
analysts said. Bernstein forecast 250 deliveries this year and
75,000 for next year, saying both "may be ambitious".
Musk has said Tesla was likely to reach a production rate of roughly
250,000 Cybertrucks a year in 2025.
The company has repeatedly warned that it would face significant
challenges in ramping the product and becoming free cash flow
positive - likely not until mid-2025 - which could negatively impact
profitability.
A brand refresh will be critical for Tesla, especially at a time
when the company is battling softening electric-vehicle demand as
well as rising competition.
"Tesla has a product problem - i.e., an older line-up that does not
address enough of the market, and has no new mass market offerings
until likely late 2025," Bernstein analysts added.
(Reporting by Abhirup Roy and Hyunjoo Jin in San Francisco and Chavi
Mehta in Bengaluru; Additional reporting by Samrhitha Arunasalam;
Editing by Devika Syamnath and Maju Samuel)
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