The Cybertruck from Tesla Gives Off SUV Vibes, Yet Criticisms Arise Over Pricing and Limited Driving Range

SAN FRANCISCO, The Cybertruck from Tesla gives Off SUV vibes, Yet Criticisms Arise Over Pricing and Limited Driving Range- Dec 1 (Reuters) – The much-anticipated release of Tesla’s Cybertruck has evoked a range of reactions, blending awe for its futuristic, SUV-like design with disappointment over its pricing and driving range disparities from earlier projections by CEO Elon Musk. The Cybertruck, despite a two-year delay, enters a competitive landscape in the pickup truck market, where it faces off against stalwarts like Ford’s (F.N) F150 Lightning, Rivian Automotive’s (RIVN.O) R1T, and General Motors’ (GM.N) Hummer EV.

The Cybertruck from Tesla Gives Off SUV Vibes, Yet Criticisms Arise Over Pricing and Limited Driving Range

Alexis Ohanian, Reddit co-founder, offered insights as one of the early recipients of the Cybertruck, likening its driving experience to Tesla’s Model X SUV. Broadcasting his inaugural drive on social media, Ohanian praised the Cybertruck’s smooth performance and noted its manageable size, affirming its potential appeal to a wide audience. He even playfully mused about being the ‘coolest dad’ while picking up his child from school in the new vehicle.

However, not all feedback has been positive. Priced at a base of $60,990, the Cybertruck deviates significantly from Elon Musk’s 2019 estimates, presenting a pricing hurdle that could potentially limit its market penetration. This pricing misalignment has contributed to a more than 2% dip in Tesla’s stock since the Cybertruck launch.

Among those expressing disappointment is Christian Cook, a financial services executive from Texas, who reserved a Cybertruck in 2019 with expectations of a more affordable pickup boasting an extended single-charge range. The current pricing structure has prompted Cook to reassess his commitment, raising questions about broader consumer sentiments and market reception for Tesla’s latest addition to the rapidly evolving electric vehicle landscape. As the Cybertruck’s initial drives hit the streets, the electric automaker navigates a delicate balance between innovative design, pricing strategy, and consumer expectations in this dynamic automotive segment.

Tesla Stock Takes a Hit Following Cybertruck’s Introduction

On Friday, the much-anticipated launch of Tesla’s Cybertruck failed to uplift the shares of the electric vehicle giant, causing a dip of more than 2% in morning trading. Priced significantly higher than initially anticipated, the base model starts at $60,990, a notable increase from Tesla’s 2019 projection of $39,900. Questions regarding the demand for Cybertrucks persist, particularly for the top model, which can cost nearly $100,000.

Tom Narayan, lead equity analyst for global autos at RBC Capital Markets, expressed uncertainties about the conversion rate from reservations, expecting it to be around 20%. He noted that the Cybertruck, designed for a specific niche market, has been more of a ‘halo car’ intended to generate demand for Tesla’s Model 3s and Model Ys.

Elon Musk, Tesla’s CEO, acknowledged the Cybertruck’s unique design during the launch event, stating, ‘Finally, the future will look like the future.’ The truck’s release comes amidst a turbulent year for Tesla, marked by soaring stock prices driven by AI goals and challenges related to price cuts and shrinking margins.

Narayan, with a 12-month price target of $301 and an Outperform rating on the stock, does not view Cybertruck sales as a significant stock driver, emphasizing its role in promoting demand for other Tesla models in the coming year.

Furthermore, Narayan shared insights into his long-term projections for Tesla stock, emphasizing a distinctive focus on autonomy. He projected that approximately 10% of the stock’s growth would be attributed to car and truck sales, while a substantial 90% would be contingent on advancements in autonomy, software, and the realization of the robotaxi and full self-driving capabilities.

In Narayan’s assessment, the pivotal factor that will define Tesla’s future trajectory lies in its ability to achieve milestones in autonomous driving technology. This aligns with Tesla’s overarching vision, where the potential success of its autonomy initiatives is positioned as a primary driver for sustained growth. As the company navigates the complexities of the electric vehicle market and contends with varying responses to new product releases, the spotlight remains firmly on its advancements in self-driving capabilities and the broader implications for the future of transportation.