By Tim Higgins and Heather Somerville
Elon Musk embraced unorthodox design choices with Tesla Inc.'s
all-electric pickup to wow truck buyers and help differentiate it
from popular models offered by rivals he knocked as boring
look-alikes.
But the features he is promising could dent the commercial
prospects of the vehicle Mr. Musk has dubbed Cybertruck.
Mr. Musk launched the triangular, steel-body truck late
Thursday. The unveiling focused principally on demonstrating how
robust the vehicle would be and how it would stand out from
well-known models such as Ford Motor Co.'s F-150 or General Motors
Co.'s Chevrolet Silverado and the GMC Sierra pickup family. The
Tesla pickup is even bulletproof, Mr. Musk said.
But when it came to demonstrating that toughness, things went
somewhat ominously off script. Mr. Musk asked his head of design to
throw a small metal ball at the side window. The resulting crack of
the window surprised the audience.
"Oh my f-ing god," Mr. Musk said. "Maybe that was a little too
hard."
The truck's unique appearance also sparked debate. The pickup
looked like the love child of a DeLorean, the unconventional sports
car featured in the Back to the Future movies, and a Pontiac Aztek,
which was widely panned as ugly in the early 2000s and became an
embarrassment for GM. Early Friday, DeLorean was even trending on
Twitter and some users were digging out past photos of the
Aztek.
Mr. Musk has defied conventional automotive industry wisdom
during the past 16 years by demonstrating that hundreds of
thousands of people are willing to pay a premium for electric cars.
Part of that was through sleek design, such as with the Model S,
which inspired people to buy a cool car that just happened to be
electric, too. The pickup aims to follow in the tradition.
As Tesla prepared the pickup, some inside the company worried
Mr. Musk's personal taste was overly influencing the design and
questioned if his preferences would be in line with buyers.
In some ways, the extreme, aggressive looks coupled with the
emphasis on ruggedness are in line with trends in the segment. Fiat
Chrysler Automobiles NV's Ram, for example, has pushed the envelope
in recent years with its brutish look and been rewarded with
increased sales, threatening GM's Silverado business.
But several analysts said Tesla went too far. The Cybertruck,
they said, could be relegated to be a niche product that lacks
appeal for the commercial buyers who make up a big part of the
buying pool. Dan Levy, an analyst with Credit Suisse, was blunt:
"Ford and GM can now breathe easy again."
Shares in Tesla were down about 6% in midday trading on
Friday.
Many on social media, especially in the videogame world, seemed
to love the looks, while others made fun of it.
Tesla has to cut a new path in trying to attract truck buyers,
who are loyal to their current brands. Toyota Motor Corp. and
others have tried to take market share from the Detroit auto makers
for years, with little luck. One area where Toyota has found
success is in midsize trucks, especially in California, where
lifestyle buyers are willing to pay for trucks to run errands and
pursue weekend hobbies.
California is Tesla's best market in the U.S. Analysts said the
Tesla truck could appeal to early adopters and those looking to
attract attention. In the 2000s, GM's Hummer brand of large,
military-inspired SUVs attracted a following among buyers looking
for a flashy ride, until high-gas prices and concerns about the
environment lead to dwindling sales and its termination. GM is
reportedly considering bringing back the SUV as an electric
vehicle.
"With its unabashed looks, we believe the truck will initially
appeal to the influencer crowd (celebrities and pop culture) and
the `look at me' crowd," said Joseph Spak, an analyst with RBC
Capital Markets. "Call the Cybertruck a Hummer for the green
millennial generation, really the ultimate virtue and vice
signaling machine."
Tesla investor Ross Gerber, chief executive of Gerber Kawasaki
Wealth & Investment, took to Twitter on Friday to praise the
new truck. "It's possible that Tesla just expanded the market for
trucks," he wrote.
Toni Sacconaghi, an analyst for Sanford C. Bernstein & Co.,
estimated annual sales might reach 50,000 trucks a year, saying its
performance could be similar to Hummer, which sold between 30,000
and 80,000 vehicles a year during its lifetime.
"Tesla's Cybertruck looks weird...like, really weird," he said
in a note to investors. "Which is too bad, because its on-paper
specs are insane and the price is very competitive & much
better than expected."
Tesla has struggled to ramp up production of every vehicle it
has brought to market since its founding, including the most recent
Model 3 compact sedan, which is part of Mr. Musk's plan to turn the
auto maker into a mainstream electric-car company. He has also
struggled to offer the vehicles at the starting price that he
initially touts.
The Model 3 didn't initially arrive in stores with the
long-promised $35,000 starting price and it took months and months
of effort and extreme cost cutting to get down to close that price.
Most sell for much more, which makes investors happy.
David Kudla, founder and chief executive of Mainstay Capital
Management and a short seller of Tesla stock, questioned Tesla's
ability to make a profit on a vehicle with a bulletproof steel
body, armored glass and such a low starting price.
"That's just reminiscent of a $35,000 Model 3 that they really
haven't gotten to in a very realistic way," Mr. Kudla said.
Write to Tim Higgins at Tim.Higgins@WSJ.com and Heather
Somerville at Heather.Somerville@wsj.com
(END) Dow Jones Newswires
November 22, 2019 12:55 ET (17:55 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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