Can Tesla's Cybertruck Bounce Back from Its Rocky Start?

 

The last time Tesla CEO Elon Musk took the stage to promote the electric car company's planned "Cybertruck," its window ended up being smashed.


 

It was a shattering debut for the vehicle, which was meant to stake Tesla's claim to the lucrative US truck market.

Four years later, as the company starts delivering the futuristic product to buyers, that problem has been fixed.

However, questions linger over whether the truck's unusual design will help or hinder its chances of success.

Mr. Musk has described the Cybertruck—characterized by its angular design and rocket-like, bulletproof steel materials—as potentially the company's "best product ever."

However, during a conversation with Wall Street analysts last month, he also sought to "temper expectations," acknowledging the "enormous challenges" ahead before the company can produce the vehicle in large numbers and turn a profit.

"It is going to require immense work," he noted. "It's not a demand issue, but we have to make it, and we need to make it at a price that people can afford—insanely difficult things."

The truck, which starts at a higher-than-promised list price of roughly $61,000 (£48,320), has complicated manufacturing due to its unique "bells and whistles," which have also added to the cost.

"We dug our own grave with the Cybertruck," Mr. Musk admitted.

Trucks are among the most popular vehicles sold in the US, with traditional sedans falling so out of favor that some carmakers have stopped producing them for the country.

However, Tesla's entry into this market comes at a challenging time—roughly two years behind schedule—as the highest interest rates in decades dampen buyers' ability to make new purchases.

In recent months, rivals like General Motors and Ford have announced plans to slow down their electric vehicle production, citing market weaknesses.

Mr. Musk has claimed that the company has over one million reservations for the Cybertruck. But it remains uncertain how many of these reservations will translate into actual sales.

Since the Cybertruck's rocky launch event in 2019, rival companies have introduced their own electric trucks, while Elon Musk's controversial social media presence has, according to critics, tarnished Tesla's brand.

Questions have already been raised about whether the Cybertruck will be as functional as other pickups on the market.

"It's not going to have the market to itself," said Stephanie Brinley, an associate director at S&P Global Mobility. "For some, the draw of Tesla and a futuristic product will be more meaningful than some of the functional issues," she added. "But for the majority of pickup truck buyers, functionality is what's going to win the day."

At an event in Austin, Texas, to celebrate the first deliveries, the company subjected the truck's windows to another shatter test—this time without incident—and promoted its hauling power and speed.

 

"It's an incredibly useful truck—it's not just some grandstanding showpiece, like me," Mr. Musk joked. He added, "This is really going to change the look of the roads."

Interested buyers will have to wait, as only about ten trucks were delivered on Thursday.

Mr. Musk mentioned last month that it would take until 2025 for the company to reach a production rate of 250,000 trucks per year.

Ms. Brinley noted that this timeline allows Tesla to address other issues impacting electric vehicle sales, such as the expansion of charging infrastructure, and to acclimate potential buyers to the truck's unique design.

"There's time to grow interest in the product," she said. "Love it or hate it, it's better than being boring."

Sean Tucker, senior editor at the auto research publication Kelley Blue Book, remarked that for Tesla, the truck's launch is less about immediate sales and more about sustaining excitement around the brand, which has seen its dominance in the electric vehicle market decline.

During a recent visit to a Tesla showroom, he observed people queuing for the chance to take a photo with the distinctive-looking truck.

"It's always going to be a relatively rare sight and what the industry calls a 'halo car' that gets people into the dealership," he said. "It's a hype exercise—it's just a question of whether it's too expensive a hype exercise."

source: bbc

 

 

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