Tesla's electric pickup truck, Cybertruck, will begin deliveries next week. The price and range of the vehicle will determine its fate.
When Tesla starts delivering its electric pickup truck, the Cybertruck, to customers next week, it will answer a question that has significant implications for the entire automotive industry: What is the actual price of this vehicle?
Zhitong App has learned that when Tesla (TSLA.US) starts delivering its electric pickup truck, the Cybertruck, to customers next week, it will answer a question that has a significant impact on the entire automotive industry: What is the actual price of this vehicle?
When Musk introduced the mid-range version of the Cybertruck in 2019, with a range of over 300 miles and a price of only $49,900 (only a few hundred dollars lower than the average price of the best-selling Ford F-150 pickup truck in the United States), the competitive price was surprising.
But that was four years ago. Today, Tesla has removed the price from the Cybertruck order page, and Musk has repeatedly warned of cost and manufacturing challenges. It is reported that inflation has caused the average amount spent on purchasing a new pickup truck to rise by 28%. Some of the reservation holders planning to attend the delivery event at Tesla's Austin factory in Texas on November 30th are concerned that a significant repricing of the Cybertruck could turn it into a toy for the wealthy.
How much is too expensive?
If Tesla's intention is to catch up with the F-150 to some extent, then the price of the Cybertruck will eventually rise to about $60,000. This price may be the dividing line between whether this vehicle is for practical use or for satisfying vanity.
Since its release in 2019, battery prices have dropped by 12%, and the price of Tesla's long-range version of the Model 3 has dropped by 5%. In July of this year, after Ford lowered the starting price of its electric pickup truck, the F-150 Lightning, to $49,995, Musk said, "It's a nice car, just a bit expensive."
Just three months later, Musk became much more "humble," telling analysts on the earnings conference call that the Cybertruck is "a grave that we're digging ourselves into," referring to the difficulties of mass-producing the Cybertruck.
Another key factor for the Cybertruck is battery range, which is particularly important for pickup truck owners because transporting heavy loads on highways can easily reduce the rated range by half, and larger vehicles require longer charging times. After General Motors introduced the Chevrolet Silverado electric truck, which can travel 450 miles on a single charge, the Cybertruck's 300-mile range no longer seems as impressive.
A good indicator for comparing pickup trucks is the vehicle cost per mile driven. Luxury adventure trucks like the Rivian R1T may have a higher cost per mile driven, but Tesla's ambitions for the Cybertruck are clearly greater. Tesla has stated that it will have the capacity to produce 250,000 Cybertrucks per year, which is more than ten times the early annual sales of the Rivian R1T and Ford F-150 Lightning. In order to sell this many Cybertrucks, Tesla must achieve a first-class level of vehicle cost per mile in order to attract a wide range of users in the pickup truck market.
At the 2019 launch event, Tesla promised to release three versions of the Cybertruck. The high-end version will be equipped with three electric motors, with a range of over 500 miles and a price of $69,900; the base rear-wheel drive version will have a range of 250 miles and a price of $39,900. However, Tesla has only registered vehicle identification numbers for the dual-motor and tri-motor models for 2024, with the government documents referring to the dual-motor model as the standard model and the tri-motor model as the performance model.
Another challenge that Tesla faces is its streamlined manufacturing strategy. Automotive giants such as General Motors and Ford offer hundreds of different models and interiors to meet the needs of any customer. In contrast, Tesla only produces four models - the Model 3, Model Y, Model S, and Model X. Each model has only a few basic customization options, such as wheel size, color, and battery performance. Tesla's idea is that the cost savings from streamlined production will outweigh the lack of choices.
This one-size-fits-all manufacturing strategy may pose problems for the Cybertruck, as the needs of pickup truck users - such as construction workers, farmers, and outdoor adventurers - do not always overlap. That's why most pickup truck brands offer multiple options: basic work trucks starting at $40,000, six-wheel cargo trucks with extended beds, and six-wheel trucks with luxury cabins equipped with back massages and leather seats.
Jessica Caldwell, Director of Insights at Edmunds, said that the Cybertruck needs a very attractive price - similar to or lower than the $50,000 starting price of the Ford F-150 Lightning - in order to have a chance of attracting traditional pickup truck buyers. Tesla's first challenge will be to prove that the Cybertruck has the right functionality and then convince users to overlook the unconventional design.
Jessica Caldwell said, "This will be the most challenging model that Tesla launches. It may sell well initially because it does resonate with some buyers, but it hasn't resonated with the mass market, and that's where the problem lies." However, the Cybertruck seems to have locked in on a niche market, which is the existing Tesla owners. A survey conducted earlier this year showed that among the 3,500 Tesla owners who plan to purchase a new car in the next two years (many of whom have never owned a pickup truck before), 37% of them are considering buying the Cybertruck.