Tesla Steers Toward Industry Profit Driver with a Pickup
Tesla is aiming for the heart of the auto industry’s profit machine with its own version of the heavy pickup truck.
Rolling onstage before a wall of lasers and flame on a California stage, the introduction of Tesla’s sharp-angled, stainless-steel “cybertruck” was not a quiet one.
Nor was it without surprises.
The vehicle, which Tesla CEO Elon Musk said will cost $39,900 and up, will have an estimated battery range of between 250 miles (402.3 kilometers) to more than 500 miles.
The electric pickup truck will be in production in 2021, Musk said Thursday in Los Angeles.
With the launch Tesla is not only edging into the most profitable corner of the U.S. auto market, it’s also gunning for buyers with fierce brand loyalty.
Many pickup truck buyers stick with the same brand for life, choosing a truck based on what their mom or dad drove or what they decided was the toughest model, said Erik Gordon, a professor at the University of Michigan Ross School of Business.
“They’re very much creatures of habit,” Gordon said. Getting a loyal Ford F-150 buyer to consider switching to another brand such as a Chevy Silverado, “it’s like asking him to leave his family,” he said.
The event in Los Angeles was intended to set Tesla’s version apart from all others. The truck’s doors were pummeled with a sledgehammer that did not make a dent.
A demonstration of the vehicle’s “armor glass” did not go so smoothly. Metal balls hurled at the car cracked two windows — though it did not completely shatter.
We’ll “fix it in post,” said Musk, who appeared caught off guard with cameras rolling.
Wall Street, anticipating further risk for Tesla, sent shares down more than 6% in early trading Friday.
The cybertruck starts at $39,900 for a single motor model, with a base price of $69,900 for a tri motor all-wheel drive model. Production for the latter is planned for late 2022.
Tesla’s pickup is more likely to appeal to weekend warriors who want an electric vehicle that can handle some outdoor adventure. And it could end up cutting into Tesla’s electric vehicle sedan sales instead of winning over traditional pickup truck drivers.
“The needs-based truck buyer, the haulers, the towers at the worksites of the world, that’s going to be a much tougher sell,” said Akshay Anand, executive analyst at Kelley Blue Book.
However, it will help Musk fill out his portfolio and offer a broader range of electric vehicles.
“Elon Musk is trying to not be one-dimensional when it comes to automotive,” said Alyssa Altman, transportation lead at digital consultancy Publicis Sapient. “He doesn’t want to look like he only has a small selection. He wants to build a brand with a diverse offering and in doing that he wants to see where he could enter in the market.”
Musk stands to face competition when his truck hits the market. Ford, which has long dominated the pickup truck landscape, plans to launch an all-electric F-150 pickup. General Motors CEO Mary Barra said its battery-electric pickup will come out by the fall of 2021.
Rivian, a startup based near Detroit, plans to begin production in the second half of 2020 on an electric pickup that starts at $69,000 and has a battery range of 400-plus miles (643.7-kilometers). The Rivian truck will be able to tow 11,000 pounds (4,989.5 kilograms), go from zero to 60 mph (96.6 kph) in three seconds and wade into 3 feet (0.91 meters) of water, the company said. Ford said in April it would invest $500 million in Rivian.
Tesla has struggled to meet delivery targets for its sedans, and some fear the new vehicle will shift the company’s attention away from the goal of more consistently meeting its targets.
“We have yet to see Tesla really make good on some of the very tight deadlines they imposed on themselves, and this has the added challenge of having architecture that is going to be challenging because we haven’t seen an EV pickup before,” said Jeremy Acevedo, manager of industry analysis at Edmunds.
By AP reporters Rachel Lerman and Cathy Bussewitz