A Tesla electric car logo is placed on a car outside a dealership in Drogenbos, Belgium on November 25, 2023. REUTERS/Yves Herrmann/File photo Obtaining licensing rights
SAN FRANCISCO (Reuters) – Reddit co-founder Alexis Ohanian, who was among the first 10 customers to receive the car on Thursday, said.
“This is the beginning of an epic journey,” Ohanian said while live-streaming his first drive of the Cybertruck on social media platform X. “Initial feeling about this car – smooth, very similar to my Model X. It’s big but not unwieldy.”
The Cybertruck, two years behind schedule, is entering the hot pickup market to compete with the likes of Ford (FN) F150 Lightning, Rivian Automotive (RIVN.O) R1T, and GM’s Hummer EV.
Starting at $60,990, the Cybertruck is 50% more expensive than CEO Elon Musk touted in 2019, and is expected to attract niche and affluent customers, at least initially.
But for many others, like Christian Cook, a Texas-based financial services executive who reserved the Cybertruck after Musk promised a cheaper pickup truck that would travel farther on a single charge, Thursday’s reveal was a disappointment.
“The prices and range of the trucks are a huge disappointment,” Cook, who drives a Model 3 and made certain financial decisions based on his plans to buy a Cyber Truck, told Reuters. “My respect for Musk has taken a hit. My loyalty to Tesla has taken a hit.”
CFRA analyst Garrett Nelson said the high price will cause customers to cancel reservations and expects Tesla to adjust prices based on demand in the future.
However, the Cybertruck, made of shiny, bullet-resistant stainless steel and inspired by a car-turned-submarine from the James Bond movie, is likely to lift a Tesla brand that has been hurt by sharp price cuts to boost demand, according to analysts. And branding experts.
“The Cybertruck is getting a lot of attention. It’s bringing Tesla back to the top of mind,” said Spencer Emmel, partner at consumer insights firm Langston, adding that it will “improve perceptions of Tesla as a unique brand.”
“But we don’t see that helping Tesla make gains in terms of becoming a big-market brand and competing with brands like Ford that serve everyday car buyers,” he said.
In fact, the electric truck’s price and longer wait time for a big financial return has left analysts worried and sent Tesla shares down nearly 2% on Friday.
Analysts said the Cybertruck would not do much for Tesla’s financial situation next year. Bernstein expected 250 babies to be delivered this year and 75,000 next year, saying both “could be ambitious.”
Tesla is likely to reach a production rate of about 250,000 Turkish Cyber trucks per year in 2025, Musk said.
The company has repeatedly warned that it will face significant challenges in enhancing the product to become free cash flow positive — likely not until mid-2025 — which could negatively impact profitability.
“Tesla has a product problem, i.e. an outdated lineup that doesn’t satisfy enough of the market, and it doesn’t have new mass-market offerings until likely late 2025,” Bernstein analysts added.
Refreshing the brand will be crucial for Tesla, especially as the company battles declining demand for electric vehicles as well as increasing competition.
Despite concerns about wider acceptance and affordability, the initial mania around the Cybertruck is clearly on the way for customers like Ohanian.
“I feel very popular,” he said after greeting another driver at a red light on his way to Florida. “I will be the best father driving my daughter to school. That is the goal in the end.”
(Reporting by Abhirup Roy and Hyunjoo Jin in San Francisco and Shafi Mehta in Bengaluru – Preparing by Mohammed for the Arabic Bulletin) (Additional reporting by Samrhita Arunasalam) Editing by Devika Simnath and Maju Samuel
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