Cybertruck – The numbers game

Pay same. Get less.  

• The Tesla Model 3 is a no brainer as it is almost as quick as a BMW M5 but costs the same as a mid-range 3 series but the same cannot be said for the Cybertruck.
• The $100 refundable deposit has ensured that the pre-order numbers are big, but as a utility vehicle, I don’t think it makes the cut when all things are considered.
• It is also worth noting that pre-orders for the Cybertruck are less than they were for the Model 3 for which $1,000 had to be deposited.
• The look of the Cybertruck is striking and it has sharply divided opinion but I think when it comes to the purchase decision, neither its looks nor the fact that the $70,000 version can go from 0-60 in an insane 2.9 seconds really matter very much.
• What really matters is the truck’s capability and toughness compared to its price and this is where the proposition comes unstuck in my opinion.
• The best-selling trucks in the USA today are light-duty trucks such as the Chevy Silverado and the Ford F150 and it is against these that Tesla has made its comparisons.
• The average price paid for a truck in the USA is $48,000 and most buyers purchase the most capable truck that they can afford.
• This means that a realistic comparison is the mid-range Cybertruck which costs $50,000, has a 300-mile range and can tow 10,000lb.
• The cheapest Chevy Silverado costs $30,000 and can tow 9,800lb meaning that in terms of utility, it is not clear what the extra $20,000 paid for the Cybertruck delivers.
• Given the price of the Cybertruck, it is also worth comparing it to heavier duty (and more expensive) trucks like the Ford F250 / F350 and the Chevy Silverado 2500 and 3500.
• Here the pricing is more comparable with the Chevy Silverado 2500 ranging from $37,000 to $70,000 depending on which version is purchased.
• Against these models, the Cybertruck also struggles as the $37,000 Silverado 2500 will tow 14,500lb compared to the equivalent priced Cybertruck which will tow just 7,500lb.
• At the top end of the range, the $73,000 Silverado 2500 can tow 18,500lb compared to the $70,000 Cybertruck which can tow 14,000lb.
• Consequently, I think that when it comes to the value proposition, the Cybertruck really struggles against its gasoline-powered competitors.
• Both Ford and Chevy are working on producing electric versions of their workhorses, but I doubt that they will come to market before the Cybertruck.
• However, I do not see this a problem for them as truck buyers care more about price, toughness and performance than looks or 0-60 which I think puts the Cybertruck at a disadvantage.
• With the model 3, Tesla squarely nailed the value proposition but with the Cybtertruck, it appears to be well wide of the mark.
• I am not expecting many of the $100 deposits to translate into real sales as a serious truck buyer is clearly better off with the petrol variants for now.
• I still see Tesla struggling long term as the more cars it sells, the more cash it haemorrhages, indicating that there is something seriously flawed with its business model and / or operations.
• I think it will end up as the electric car division of one of its larger rivals who have the know-how to make vehicles and generate cash at the same time.