Elon Musk wants his Tesla Cybertruck even if no one else does – Liam Denning

Liam Denning analyses Elon Musk's controversial Cybertruck launch, questioning its impact on revenue and profits. While Musk embraces anti-advertising, the Cybertruck's unique design prompts speculation about Tesla's strategy. With predictions uncertain, Denning explores the vehicle's appeal, potential market share, and its role in sustaining Tesla's EV dominance. Despite doubts about short-term financial gains, the Cybertruck serves as a publicity stunt, ensuring Tesla remains central in the electric vehicle debate. Is it a bold move defining the future or a manifestation of Tesla's market-leading hubris?.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..Musk Wants the Cybertruck Even If You Don't: Liam Denning.By Liam Denning.(Bloomberg Opinion) — If you saw Elon Musk's profane performance the night before the Cybertruck's launch and aren't considering buying one, then presumably you now know what you can go do. Tesla Inc. famously long avoided advertising, while its chief executive seems to be embracing a form of anti-advertising these days. But in assessing the significance of Tesla's latest vehicle, unveiled Thursday, advertising seems the most useful rubric..___STEADY_PAYWALL___.That one is even contemplating the meaning of this new product suggests Tesla is winning already on some level. Musk has over the years inserted himself, sometimes grotesquely, into such non-vehicle-related situations as a Thai cave rescue, pandemic prognoses and, of course, the Israel-Hamas War. He has perhaps internalized the old saw of it being better to be talked about than not more than Oscar Wilde ever did..In that sense, the Cybertruck is a continuation of the theme, maximizing time in the public glare, whatever the reaction. We know from Walter Isaacson's recent biography that the vehicle's unusual, and challenging, design results largely from the findings of that peculiarly small focus group residing in Musk's head..Predictions of how well the Cybertruck will sell are on the shakiest of ground because it lacks useful precedent. Musk claims more than one million reservations, but since those cost only $100 for a vehicle starting initially at roughly an "estimated" $80,000 to $100,000, before tax credits, it's unclear how many will choose to forge ahead. The cheaper version, costing an "estimated" $60,990, isn't available until 2025 (as of now) according to Tesla's website, and also has an estimated range of only 250 miles..While the Cybertruck is ostensibly a pickup and, with Musk touting "torsional stiffness," adheres to the prevailing macho US truck aesthetic, judging its prospects as a function of the pickup market seems futile. Fleet buyers aren't going to touch an expensive, unproven vehicle whose stainless steel body portends potentially expensive visits to the shop. They also generally don't prize Porsche-beating acceleration or "bullet-tough" panels (even Musk himself didn't justify that feature on practical grounds). Anyone who genuinely needs towing capability will be wary of electric pickups in general due to the accompanying loss of range..Its primary appeal rests on Tesla being known for cutting-edge technology, particularly its software and battery packs, and for looking like nothing else on the road. Musk deployed the word "rare" three times in the first couple of minutes of Thursday's launch event and boasted that "finally the future will look like the future." The Cybertruck is for people with money to spend and who like having the cool new thing, preferably in the most visible way possible; less contractor, more influencer. Some early adopter will surely apply for "GFY" plates the second they can and then, as soon as they arrive, post a shot of them on X and tag their hero..In terms of revenue and profits, the Cybertruck looks like a non-event on the former and likely a drag on the latter, at least in the near term. Musk himself was downbeat on its prospects on the last earnings call, with his comments about hubris raising the specter of the Model X, an expensive, overengineered SUV that has sold in relatively limited quantities. While he talked of getting to 250,000 deliveries by 2025, anyone plugging Musk's predictions into their models at this point should just be hardcoding the outputs. Consensus estimates put deliveries next year at about 78,000, although the range spans 20,000 to 140,000, and 165,000 in 2025. Even assuming the latter, the Cybertruck would amount to only about 6% of estimated deliveries overall by then..On the other hand, the consensus implies Cybertrucks accounting for around a fifth of the growth in Tesla's vehicle deliveries over the next two years..Growth in vehicle deliveries are expected to slip below its target of 50%, compounded, next year and profits have already been savaged by price cuts this year. Launching an expensive, experimental vehicle isn't going to do much to help that..As an exercise in publicity, however, it probably helps to keep Tesla at the center of the debate about the future of vehicles. Given the success of the Model Y, the sensible next product would have been some sort of cheaper, all-electric minivan or the hotly anticipated, but still non-existent, sub-$30,000 vehicle dubbed the Model 2. But the Model Y's look and technology are incremental and, while it generates profits, it lacks the sci-fi qualities that excite the CEO (which perhaps offers clues about how much most US drivers are willing to spend on futurism, but anyway)..On that level, the Cybertruck may act like a hulking Superbowl ad, reminding people that Tesla still sets the agenda for EVs, in the US anyway. The company is helped by the continuing struggles of legacy automakers to commercialize compelling electrified models of their own. And Tesla is helped, above all, by the stock's premium — 78 times forward earnings — predicated as it is on belief in an electrified, autonomous future dominated by Musk. The Cybertruck is, in essence, an expression of that valuation and the latitude it provides Tesla to indulge its hubris..Read also:.My truck is better than yours – Elon Musk vs FordElon Musk, slinging expletives, says advertiser exodus on X may kill the social media platform🔒 Elon Musk's three-year red-pilled rabbit hole: Antisemitic tweet sparks corporate exodus from social platform X.© 2023 Bloomberg L.P.

Elon Musk wants his Tesla Cybertruck even if no one else does – Liam Denning

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