Tesla’s Cybertruck divides buyers’ opinions

Tesla’s pricier-than-expected Cybertruck bakkie, 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 bakkie market to compete with the likes of Ford’s Lightning, Rivian Automotive’s 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 would be the “coolest dad” picking up his child at school.

Starting at $60,990, the Cybertruck is more than 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 more than 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 bakkie that travels farther on a single charge.

“The truck pricing and range is a huge letdown,” said Cook, who drives a Model 3, adding 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.

Gets attention

The Cybertruck, made of shiny, bulletproof 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 such as Ford that are serving the everyday car buyer,” he said.

Indeed, the electric bakkie’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 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 a 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 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 about 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 — probably not until mid-2025 — which could negatively affect profitability.

A brand refresh will be critical for Tesla, especially while the company is battling softening electric-vehicle demand as well as rising competition.

“Tesla has a product problem — an older line-up that does not address enough of the market, and has no new mass market offerings until probably late 2025,” Bernstein analysts added.

Reuters