The Auto Sunday is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.
Weeks after the unveiling of the Tesla Cybertruck, the internet has slowed down with their #cybertruck memes. Now, the auto industry critics wonder how the Tesla Cybertruck success–or failure–will affect the fortunes of the company’s CEO, Elon Musk.
As the CEO of technology giant Tesla and SpaceX, Musk became one of the most celebrated figures in science and technology. But, in 2010, Musk’s reputation in technology and the auto industry, became questionable.
In the past decade, some of his ventures started losing both money and investor confidence. This is especially evident in Tesla, which still thrives to this day because of the bizarre things Musk did in public like his smoking marijuana on Joe Rogan’s Podcast. Later on, this cost Tesla’s stock prices to sink a record low.
Despite these issues, Tesla still managed to meet its projected sales targets because they had to. If you remember, Musk lost $1 billion in just two minutes for not meeting the production demands of Model S and Model X. Because of this, Tesla shares sank by a whopping 11 percent.
This could be the reason why Musk is so eager to achieve the Tesla Cybertruck success. But what are the things Tesla can do to make that happen?
The Road to Tesla Cybertruck Success
Elon Musk promised the public that Cybertruck will be futuristic and innovative, like something out of the sci-fi movie “Bladerunner.” That’s a pretty ambitious goal for what seems to be the world’s first electric pickup truck. This is why many people are doubtful whether Tesla can deliver the final product as they have envisioned.
Despite the mocking and questioning of the public, Musk doesn’t seem to be backing down from his words. With the pre-orders of Cybertruck rushing, we can see why he is very confident with this pickup truck. Setbacks and losses may have happened but these things don’t scare Musk.
Enter the International Market
Musk expressed that his company plans to sell electric vehicles all at once to a much larger international market. To make this possible, Tesla’s opened a huge factory in Berlin, in addition to the three factories it has now in the U.S. and in Shanghai.
According to the Morgan Stanley analyst Adam Jonas, there’s the possibility of Tesla shares rising to as much as $500 with the Tesla Cybertruck success and the sales in China picking up the pace.
Jonas even raised his most optimistic scenario to $500 from $440 per share. He said the $20 was because of the Cybertruck unveiling last November 21st and the $40 was from the incremental volume and profit in China.
Although Elon Musk has said on Twitter that the Cybertruck currently has 250,000 pre-orders, Jonas gave an assumption that roughly 40% of those would translate to an actual sale by 2024. He explained, “We believe this is a fairly optimistic assumption, given that a pre-order only requires a $100 refundable deposit.”
Drop the Prices
Tesla already slashed the price of its Model 3 from $51,000 to $46,400. Now, it looks like the Cybertruck is following suit since its price starts at $39,900–much cheaper than rival Rivian R1T’s $61,000.
If Tesla will play its cards right, it could definitely hold on to its share in the electric vehicle market as an avant-garde brand, surpassing its rivals like Rivian, Ford, and even BMW. With Tesla Cybertruck success, Tesla could be well on its way to being a self-sufficient company in the long run.
Appeal to the Younger Generation
Despite what seems to be a glitch-filled presentation of the Cybertruck, pre-orders are rolling in. And while car and truck enthusiasts are not sure how they feel about this truck, the younger generation thinks the Cybertruck looked cool.
This is an important consideration since they are the ones who will be buying this so-called truck of the future. With this breakthrough, we can expect Tesla Cybertruck success and that in turn can change Tesla’s fortunes for the better.
The last time this kind of breakthrough happened, Musk sold Paypal, founded SpaceX, and funded Tesla. If Musk can pull it off again, we won’t be surprised.
Live Up to Its Promise
If Tesla can live up to its promise in executing and delivering its electric truck on time, we can see that Tesla Cybertruck success and the rest of Tesla cars in the next five years.
Tesla is known for being an overpromising and underperforming company. If they don’t do something about that, their leadership position will be in jeopardy with the increased competition in the market.
Nonetheless, Tesla could still lead in what may be a bigger market in five years if it’s able to execute. In order to do that, it needs hefty demand, international expansion, and variety into other markets. Elon Musk must also step up his game. A tall order, but basing from its recent moves, is possible.
Keep Its Lead
So far, Tesla is the leader in the electric vehicle market today. The company and its celebrity CEO Elon Musk have become household names. Not only does Tesla and Musk have a huge following of supporters, but they also have an equal amount of critics.
Investing in Tesla requires a sturdy resolve given the unpredictable nature of its performance and its stock price. During the early part of 2019, Tesla was dealing with losses. But when spring came, it surprisingly acquired a huge profit.
The electric vehicle market may still be tiny today, but it’s expected to explode in the years to come. According to Allied Market Research, the electric vehicle market had a value of $118 billion in 2017 and is projected to grow to $567 billion by 2025, representing a CAGR of 22.3% from 2018 to 2025.
Tesla can keep its leadership position in the growing electric vehicle market as environmentally conscious consumers and those who seek more technology in their vehicles are drawn to the company. Also, its latest Smart Summon feature is generating a lot of buzzes.
With this feature, customers can summon their car from a parking spot or driveway without a driver behind the wheel. Since its launch will be in two years, we can be sure that it will be tested for more than a million times.
Take Advantage of Being First
Being one of the pioneers in the electric car vehicle market comes with advantages, but that doesn’t assure that Tesla’s leadership won’t be tested. The giant vehicle manufacturers like Ford and BMW are also getting into the market. If Tesla will keep its growing sales, they will be in a great position to succeed as a viable stock market option.
Tesla also made the move to boost its prospects with international expansion. Selling its cars in as many countries as possible now is crucial to the company’s future success. Tesla already has manufacturing facilities in the U.S. and Shanghai.
But now, they also have their fourth Gigafactory that will be located in Berlin. The locations of these factories are perfect as this can help Tesla serve international customers easily.
Tesla also continues to become innovative with its vehicles. That is evident with its Cybertruck that was unveiled this November 21st.
Diversify the Business
Tesla doesn’t need to just settle with creating electric vehicles. It also has an opportunity to diversify the business into the energy market, which will boost its shares in the future. The climate change is reaching crisis levels and that becomes the top concern of millions of people. With this dilemma, the demand for alternative energy sources is expected to grow.
If Tesla can produce products that will meet that need, it will open a huge opportunity for the company. Musk even mentioned that while reporting the company’s third-quarter earnings. He envisioned Tesla’s energy business getting big or bigger than its car operations.
Tesla Cybertruck success will ultimately be up in the air. Its solar roof tiles haven’t taken off with consumers yet, but we can see promising signs that the business is finding its footing. The reported energy storage deployment already hit 477 MWh in the third quarter.
That’s an all-time high for the company. That’s plausible progress if we compare that two years ago, it deployed more than 160 MW of solar.
Investors in Tesla surely have had a rocky ride over the years, but the company’s profits seem to be firing on all cylinders these days. Its production is up and running in China, its gross margins increased even as the price of the Model 3 slashed down, and we’re all anticipating the Tesla Cybertruck success.
If Tesla can stay the course, we can definitely see its growth in the next five years.
A DMC DeLorean Descendant
When Elon Musk unveiled Tesla’s Cybertruck, the Internet, especially the Twitterverse, went into meme mode and compared the truck to every ridiculous thing from a doorstop to Flats the Flounder.
But now that they have mellowed down, the more serious things are catching the critics’ attention. Enthusiasts who have been in the auto industry for years noticed another distinct comparison: The Cybertruck certainly resembles the classic DMC DeLorean.
This iconic car became famous because of its role as a time-traveling sports car in the Back to the Future movies. Just like the Cybertruck, the DeLorean had the hard edges of the stainless steel and the angular design.
However, unlike the Cybertruck, the DeLorean is all about the looks. It didn’t have the superb performance to back up the car’s style. That is why in 1983, its production halted with only 9,000 of the futuristic sports cars produced.
Elon Musk and John Z. DeLorean are considered iconic renegades with the vehicles they created. Although, DeLorean was an automotive insider. But they both were upset by the auto industry’s idleness with its lookalike designs. The two shared a vision for breaking the mold but of the two, Musk proved to have a powerful influence.
Like the DeLorean during its time, the Cybertruck design is absolutely a polarizing topic/concept. And, that’s exactly what Musk is going for. Tesla is trying to penetrate the light-duty pickup truck – the most profitable sector in the US automotive market. If they will embark that challenge with a lookalike, they will be eaten alive with the company giants.
Also, that is definitely not the Elon way of doing things. Making the Cybertruck as different on the outside as it is on the inside helps it break the norm.
Innovative Yet Flexible
Musk tweeted that Tesla received more than 250,000 reservations for the Cybertruck just days after the unveiling. This is a remarkable number, even if you would only need to pay a $100 deposit.
Musk explained that he doesn’t need every truck enthusiast to like his design. He just needs 5% to 10% of potential pickup buyers to absolutely love it. If he can do that, he might eventually hit the Tesla Cybertruck success.
The Tesla Cybertruck success will give Tesla an opportunity to establish a footing and build credibility in the automotive industry. Last year, Musk admitted in his interview on the Recode Decode podcast with Kara Swisher that he doesn’t know if a lot of people will buy this Cybertruck or not.
“If there’s only a small number of people that like that truck,” he said, “I guess we’ll make a more conventional truck in the future.”
That message proves that Musk is innovative, yet flexible. He uses the Cybertruck’s edgy design to introduce his concept — a first step to show the world that an all-electric pickup really is possible. But if it doesn’t gain mass market acceptance, Tesla is willing to produce a more conventional design to satisfy the traditional buyer.
Wall Street Is Not Impressed
Pre-orders for the Cybertruck keep coming in and have reached 250K, according to Musk’s last tweet. That’s an impressive result, but Wall Street isn’t convinced of Tesla Cybertruck success for being the electric-vehicle pioneer because these orders might not be full-fledged.
Emmanuel Rosner, a Deutsche Bank analyst, explained, “The high number of initial pre-orders for Tesla’s Cybertruck is an encouraging sign for the vehicle with a controversial design, even though reservations only require a $100 refundable deposit.”
But it’s that $100 figure that makes the analysts pause. It’s a low amount for a reservation fee. With that amount, there’s a huge possibility that Cybertruck reservations won’t get converted into deliveries.
“Usually conversation rates have been north of 70% based on our estimates,” Wedbush analyst Dan Ives added. He explained that with only a $100 deposit compared to $1,000 to $2,500, conversion rates are expected to be much more fickle on the Cybertruck. Also, most deposits are fully refundable.
The Cybertruck order number may be complicated, but that’s not something that investors need to overthink. “The pipeline of preorders is a great feather in the cap for Musk,” says Ives. “But it all comes down to conversion in 2021 and 2022, that’s what the Street is focused on.”
Rosner also sees Tesla Cybertruck success despite its low reservation price. “The high trim mix of initial reservations is potentially even more positive (than reservations),” Rosner explained, “We struggled to see how Tesla could generate positive margins on the (rear-wheel drive) model.”
With its controversial launch event, Tesla stock went down by 5%. Cybertruck’s odd design might be responsible for that, but on the brighter side, the stock is still up about 55% over the past three months. The traditional truck maker Ford Motor, on the other hand, had its shares risen about 4% since the Cybertruck unveiling.
Tesla Cybertruck Success or Fail?
Although production officially starts in 2021, Cybertruck is the one pickup that many fanatics are looking forward to getting their hands on by the end of this year at least the one in prototype mode.
Depending on your perspective, the Cybertruck may look like it was made from cheap metal sheets pounded together into a four-wheel ice pick stuck right in your eye, or it’s a clever marketing scheme that earns Tesla millions of dollars with just a $100 deposit required to reserve one.
On Musk’s tweet, he mentioned that he’s taken more than 250,000 deposits for the Cybertruck. At $100 each, that’s $25 million — plenty of cash, but not enough to significantly reform a company that is valued at almost $78 billion.
Despite the company’s history of sporadic delivery on promises, we still have high hopes for Tesla Cybertruck success. Musk is not someone who will resort to a scheme just for a quick buck. He’s already established a group of brand faithful who buys his products as quickly as he can make them.
More importantly, Musk believes what he says, even if the result gets delayed, like what happened to the first Tesla Roadsters, the hyperloop rapid transit system or colonizing Mars.
Setting the Future of Truck Industry
The Cybertruck feels like a descendant of the wedge cars from the 1960s and 1970s like the flatbed version of the Lotus Esprit, BMW M1, Lancia Stratos, Ferrari PF Modulo, DeLorean and Lamborghini Countach.
Those iconic design surpassed the car world and became pop culture. They towered above the fashion editorials and were immortalized in Hollywood blockbusters. When the Cybertruck finally hits the road, it should do the same.
For the past decades, the truck has evolved following the evolution of the American consumer. An increasing number of Americans bought trucks, not for farming or ranch work. Over time, trucks became more luxurious and expensive. Now, a rolling-office quad cab, with leather heated seats and an entertainment system is available in the market and it befits a town car. Although this truck will cost you mid-six figures.
Pickup trucks have all looked the same. Ford F-150 has set the pattern, then the other automotive companies produced trucks that looked like Ford F-150. Whether Tesla Cybertruck success or failure, this will indicate the future of the truck industry as a whole.
It’s the design, energy efficiency, and low price that the Cybertruck is trying to set here. Two years from now, we will see the improved version of the Cybertruck. We just hope that it won’t get swayed by the opinions of the critics to just go traditional like everybody else. In this world full of copycats, we need a Cybertruck that’s not afraid to stand out from the rest.
Why did the Tesla Cybertruck not have side mirrors?
Side-view mirrors are no longer necessary in Tesla Cybertruck for aiding driver traffic sensing. It is already equipped with an autopilot system that has cameras that can execute that function better. The only reason side view mirrors are there is because of the laws in some jurisdictions requiring them.
With cameras installed inside the car, blind spots are removed, you don’t have to worry about the glare and darkness. Hopefully, side view mirrors won’t be a legal requirement for the Cybertruck to go into production. Replacing the side-view mirrors with cameras will also cut costs and increase streamlined efficiency. And, of course, you can’t break one when pulling into the garage—if it is not there.
Will the Tesla Cybertruck come in a matte black?
Content creator @SfwanAhmedMia released a matte black version of Tesla Cybertruck and pitched the idea to the Tesla CEO Elon Musk via Twitter. Musk replied with a simple, “Sure.” This means that he is open to the idea of a matte black Cybertruck, and it could be an option for buyers in the future. So, we are all looking forward if Elon Musk will release a matte black version of his revolutionary Tesla Cybertruck.
This all-electric pickup has been getting some tough love since its unveiling. The CYBRTRK’s futuristic unconventional design may just be too advanced for some people’s tastes now. But, two years will still pass. It will eventually grow on the public eye. Then, people will start to look at it in a different way, like Musk did with an average-looking pickup truck.