Why Tesla’s Cyber Truck Might Flop

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The Cybertruck is a pickup truck for people who do not need a pickup truck.

One of Tesla’s core accomplishments has been to change the public’s idea of what and who electric cars are for. The company’s most successful models have dramatically expanded its addressable market, reaching swaths of buyers beyond the traditional environmentalists.

Its marketing has always been more about trendsetting, innovation, and desirability. Its cars have succeeded because they felt like the future.

The Preface

A few weeks ago, Tesla made its boldest statement when it launched a new pickup truck called the Cybertruck. Everything about it screams tough. It has a stainless steel exoskeleton and armor glass windows. Its radical design was also instantly polarizing.

Retailing at $40,000, the Cybertruck will compete at the high end of the truck market. Think incumbents like Ford’s popular F-Series and Chevy’s Silverado. But for the first time, Tesla may have missed the mark with its marketing. It overshoots the target audience entirely.

The Reasons

The large truck market is one where environmental concerns take a backseat to features such as capacity, power, and ruggedness. Tesla’s Cybertruck embodies a vision of cool that seems to be pitched at no one so much as Mr. Elon Musk.

No one can accuse the Cybertruck of lacking the muscle. It is enormous. It looks like a post-apocalyptic armored vehicle. The base model boasts a towing capacity of 7,500 pounds, on par with some of the top sellers in its class. On specs alone, Cybertruck fits all the requirements.

The vehicle is certainly distinctive. However, it might be too distinctive.

To put another way, is it distinctive in a way that appeals to the right people? To succeed, the Cybertruck needs to appeal to people who are traditional truck buyers. And market research shows that pickup owners do not just make their decisions on just the basis of performance. They value tradition, and show the highest brand loyalty of any vehicle buyer. A contractor is not going to show up to a work site in this truck.

But there is also another worrying sign for the Cybertruck. What is the one thing that pick-up truck owners hate the most? Price hikes.

The Cybertruck’s $40,000 base price is already high for their audience. And to get key features such as AWD and a longer range, you will need to pay upwards of $50,000.

What is the Takeaway?

As successful as Tesla has been at reaching new buyers, its strategy of fusing each new model with Mr. Musk’s high-tech aesthetic is showing its limits. No doubt there are others who share his tastes, especially among California and New York’s elite. They are the type of people who might feel right at home in a Cybertruck and can easily afford it.

But if Tesla is serious about widening its audience, pickup trucks are not a bad bet. But designing and marketing them to its existing fans is a missed opportunity.

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My name is William. I am a private equity investor and the owner of Million Dollar Tips. Over the last 5 years, I have been committed to growing both as a person, and as a professional.

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