SAN FRANCISCO, Dec 1 (Reuters) – Tesla’s ( TSLA.O ) Cybertruck pickup is more expensive than expected and offers far less driving range than CEO Elon Musk promised, deeply disappointing some but enticing others for its futuristic, SUV-like feel.
The Cybertruck, two years behind schedule, is entering the hot pickup truck market to compete with the likes of Ford’s ( FN ) F150 Lightning, Rivian Automotive’s ( RIVN.O ) R1T and General Motors’ ( GM.N ) Hummer EV.
Reddit co-founder Alexis Ohanian, one of the first dozen customers to pick up the vehicle Thursday, said the Cybertruck drives and feels like Tesla’s Model X sport utility vehicle.
“Initial feeling about this vehicle – smooth, drives a lot like my Model X. It’s big but not useless,” Ohanian said while live-streaming the Cybertruck’s first drive on social media platform X. “Awesome Dad” picks up his kid at school.
Starting at $60,990, the Cybertruck is 50% more expensive than CEO Elon Musk said it would be in 2019. This can reduce the vehicle’s appeal. Shares of Tesla fell more than 2% ahead of the announcement.
Among the disappointed was Christian Cook, a Texas-based financial services executive who reserved a Cybertruck in 2019 after Musk promised a cheaper pickup that would travel longer distances on a single charge.
“There’s a big decrease in truck price and range,” Cook, who drives a Model 3 and has made some financial decisions based on his plans to buy a Cybertruck, told Reuters. “My respect for Musk has taken a huge hit. My loyalty to Tesla has taken a huge hit.”
CFRA analyst Garrett Nelson said the steep price tag could lead to customers canceling reservations and expects Tesla to adjust prices based on demand going forward.
The Cybertruck, made of shiny, bulletproof stainless steel and inspired by a car-turned-submarine from a James Bond movie, is likely to lift Tesla’s brand from steep price cuts that will boost demand, according to analysts and Branding. experts.
“Cyberdrug is getting a lot of attention. It’s bringing Tesla back to mind,” said Spencer Imel, a partner at consumer intelligence firm Langston.
“But we don’t see it helping Tesla become a mass-market brand and compete with brands like Ford that cater to the everyday car buyer,” he said.
Indeed, the price of the electric pick-up and the long waiting time for significant financial payments have analysts worried.
Musk’s personal ability to build the Tesla brand was called into question this week after a live interview in which he cursed advertisers who left his X social media platform, Twitter, with antisemitic material.
That creates tension among investors and some consumers and could drag Tesla’s appeal, said Alan Adamson, co-founder of brand and marketing consultancy Metaphor.
“Many of Tesla’s early adopters are being rudely awakened to the dream of a sustainable future,” by some of the “weird things” he did that turned him from “rebel” to “misfit.” Few, said JP Kuehlwein, assistant professor of marketing at Columbia University Business School.
Cyberdrug won’t do much for Tesla’s finances next year, analysts said. Bernstein predicts 250 deliveries this year and 75,000 next year, which he said may be ambitious.
Musk said Tesla will reach a production rate of about 250,000 Cybertrucks per year by 2025.
The company has repeatedly warned that it faces significant challenges in improving production and turning free cash flow positive through mid-2025 — which could negatively impact profitability.
A brand refresh will be important for Tesla, especially at a time when the company is struggling with softening electric-vehicle demand and increasing competition.
“Tesla has a product problem — namely, an old lineup that doesn’t address the market well enough, and no new mass-market offerings until late 2025,” the Bernstein analysts added.
Reporting by Abirup Roy and Hyunjoo Jin in San Francisco and Savi Mehta in Bangalore; Additional reporting by Samrita Arunachalam; Editing by Devika Syamnath and Maju Samuel
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Reports on U.S. technology companies, including key semiconductor companies. His work usually appears in the technology and business sections.