Tesla’s ‘Cybertruck’: EV game changer or dud?

Source: By David Iaconangelo, E&E News reporter • Posted: Thursday, November 21, 2019

Tesla Inc. will unveil details on its first electric pickup truck tonight, marking the company’s entry into one of the most competitive and high-profit corners of the auto industry.

The Cybertruck’s unveiling at the Tesla’s design studio in Los Angeles is meant to coincide with the date and location of the 1982 science-fiction classic “Blade Runner,” which CEO Elon Musk has cited as an inspiration for the vehicle’s design.

In interviews, Musk has promised nothing short of a product that would shatter the mold for pickups. The Cybertruck, he told the fan podcast “Ride the Lightning” this summer, would be “unrecognizable” from the last 40 years of trucks, resembling an “armored personnel carrier from the future” that could sell for $50,000 or less and perform better than Ford’s F-150.

But the company that sees itself as fighting a holy war against the gas car may be facing stiff odds, analysts say.

“There are more challenges in this segment than in any other previous one,” said Sam Abuelsamid, principal analyst for mobility at Navigant Research.

Pickup truck drivers are among the most brand-loyal and the least likely to be swayed by a car’s environmental profile, Abuelsamid and other analysts said.

Pickup trucks represent about 17% to 18% of light-duty vehicle sales in the United States, making the Cybertruck a potentially significant source of revenue for Tesla, wrote Deutsche Bank analyst Emmanuel Rosner in an investor’s note this week.

Rosner wrote that the bank expected investors’ focus to be “on how well the actual design resonates with pickup buyers.”

Another question is whether the Cybertruck can appeal to two kinds of drivers — those who use their trucks for work and those who do so for pleasure.

Full-size pickups like the F-150 find use from landscapers and construction contractors, or as a “lifestyle” car that tows boats, Jet Skis or trailers, said Stephanie Brinley, a principal automotive analyst at IHS Markit.

“I’m not saying Tesla won’t succeed. But they’ll have a different competitive environment than before,” said Brinley.

‘Worst-case scenario’

Tonight’s event comes during a contentious week for the auto industry.

Even as companies roll out new all-electric models for the Los Angeles Auto Show, proponents of stronger fuel efficiency standards have stepped up their criticism of automakers who sided with the Trump administration’s effort to strip California of its independent emissions authority.

The California Air Resources Board, for instance, said they would boycott the show in LA. And the environmentalist Sierra Club announced ad buys accusing General Motors Co., Toyota Motor Corp. and Fiat Chrysler Automobiles NV of “[putting] on a greenwashing show in Los Angeles.”

Deliveries of the Cybertruck are likely to trail that of electric automaker Rivian’s R1T, set for late 2020, and Ford has plans to release its own all-electric version of the F-150.

Still, those offerings aren’t likely to trigger a mass, industrywide unveiling of new electric pickups, said Kevin Tynan, senior auto analyst for Bloomberg Intelligence.

For legacy automakers, that would be “the worst-case scenario,” he said.

More likely, he added, automakers would protect their most lucrative slice of the vehicle market by introducing extra incentives for existing pickup models, if there’s any sign their share is slipping.

In order for electrification to take hold across the pickup segment, Tesla and others will need to prove that they can do it profitably and for an extended period.

“People are looking at it like, this makes everybody get in the game [of electrification]. They’re only half right. You’re getting in the game if you’re doing it profitably,” said Tynan.