Is Tesla’s Cybertruck too sci-fi for success?

The new stainless-steel spaceship-on-wheels is affordable, (very) fast and capable, but we don’t see it taking meaningful market share just yet

Andrew Willis 29 November, 2019 | 1:08AM

 

 

Andrew Willis: Either Elon’s bulletproof window blunder was a blessing in disguise, or it was a genius PR move. Tesla’s new Cybertruck may not have gotten the coverage without it.

Then again, the specs on this “pickup truck” are so space-age and impressive, that they deserve as much attention as its “modern” – and controversial – aesthetics. It’s faster and stronger than almost anything out there.

For Tesla investors and enthusiasts, the order volume is certainly validation. 200,000 orders came in within a few days of the launch, bolstered by an attractive starting cost of only $39,000 U.S. dollars.

Our sector strategist, David Whiston, doesn’t see the Cybertruck appealing to pickup owners, nor does he see it taking much market share from the Detroit Three. The Cybertruck, however, may give Amazon-backed competitor Rivian – whose less-capable, and significantly more expensive pickup truck due next year - a run for its money.

Whiston says that Tesla’s current low-cost option, the Model 3, still needs to be far cheaper to see mainstream sales volume. However, Whiston says shareholders may soon see benefits from growing margins as massive investments in battery producing ‘gigafactories’ payoff. 

Now the Cybertruck isn’t due for at least a couple of years. But if the orders and deposits continue to roll in and economies of scale continue to improve, Tesla may be set for sustainable performance by the time this truck hits the road. 

For Morningstar, I’m Andrew Willis.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Tesla Inc354.90 USD1.74

About Author

Andrew Willis

Andrew Willis  Andrew Willis is a content editor for Morningstar.ca.