San Francisco, December 1 (Reuters) – Tesla’s hopelessly expensive Cybertruck, which falls far short of CEO Elon Musk’s promises in terms of driving range, has deeply disappointed some but captivated others with its SUV-like feel.
The Cybertruck, delayed by about two years, is entering the hot pickup truck market to compete with Ford’s F150 Lightning, Rivian’s R1T, and General Motors’ Hummer EV.
Reddit co-founder Alexis Ohanian, among the first dozen customers to receive the vehicle on Thursday, described driving the Cybertruck as feeling similar to Tesla’s Model X sport utility vehicle.
Ohanian took to social media, lifting his child in the Cybertruck, proclaiming himself the “best dad.”
Starting at $60,990, the Cybertruck, as Elon Musk stated in 2019, is over 50% more expensive than promised, potentially diminishing its appeal. Tesla’s stock has dropped over 2% before the launch.
Among the disappointed is Christian Cook, a financial services executive in Texas, who had booked a Cybertruck in 2019 after Musk promised a cheap pickup capable of long-distance travel on a single charge.
Cook, a Model 3 owner, told Reuters that he made financial decisions based on his plan to buy the Cybertruck. “There has been a significant drop in my respect for Musk. The price and range drop have hit my loyalty to Tesla hard.”
CFRA Research analyst Garrett Nelson predicts that due to the high price, customers may cancel reservations, and he hopes Tesla will adjust pricing based on demand.
In terms of analysts and branding experts, the attention-grabbing, bulletproof stainless steel Cybertruck, inspired by the iconic James Bond car, could lift Tesla’s brand, which has been affected by heavy price cuts to boost demand, according to specialists.
Spencer Emel, partner at consumer insights firm Langston for Consumer Insights, said, “The Cybertruck gets a lot of attention. It brings Tesla back into the conversation.”
However, he added, “But we don’t think it will help Tesla become a mainstream brand and compete with brands like Ford, which are providing services to everyday car buyers.”
Indeed, the long wait for electric pickups, along with concerns about the price and significant financial commitment, has worried analysts for some time.
Questions have also been raised this week about Musk’s personal capacity to build the Tesla brand, following a live interview in which he criticized advertisers who left his ex-social media platform, formerly known as Twitter, due to anti-Semitic content.
Brand and marketing consultancy Metaphors co-founder Alan Adamson says it’s creating anxiety among investors and some consumers, impacting Tesla’s appeal.
“Many early Tesla enthusiasts, who had dreamed of a sustainable future, are being rudely awakened by some ‘strange moves’ made by the company, turning them from ‘admirers’ to ‘bewildered individuals,'” said JP Kuehlwein, Assistant Professor of Marketing at Columbia University Business School.
Analysts suggest that the Cybertruck won’t do much for Tesla’s financial situation next year. Bernstein, estimating 250 deliveries this year and forecasting 75,000 deliveries next year, said both figures “could be ambitious.”
Musk has claimed that Tesla could reach an annual production rate of around 250,000 Cybertrucks by 2025. The company has repeatedly warned that it will face significant challenges in increasing production and making free cash flow positive, possibly not until around 2025, which could have a negative impact on profitability.
A brand refresh for Tesla will be crucial, especially at a time when the company is grappling with softening demand for electric vehicles amid increasing competition.
Bernstein analysts said, “Tesla has a product problem – that is, an aging lineup that doesn’t appeal sufficiently to the market and likely won’t offer a significant market proposition by the end of 2025.”
Reporting by Abhirup Roy and Hyunjoo Jin in San Francisco and Chavi Mehta in Bengaluru; Additional reporting by Samridhi ArunAsalam; Editing by Devika Syamnath and Maju Samuel.
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