November 20th, 2019 by Paul Fosse
In this article, I’ll talk about how Tesla’s announcement of its CyberTruck will hurt sales of other pickup trucks, even before the truck ships its first unit. Make sure you also read Frugal Moogal’s article about the broad effects of the industry’s transition to electric vehicles and compares this transition to how other industries dealt with (or didn’t) their own transitions. Frugal also wrote an article that is more specific, dealing with the Mustang’s effect on Ford.
Features That I Expect In The CyberTruck
Like all Tesla vehicles announced to date, I expect the CyberTruck to follow the Tesla playbook. That involves matching the competition on many features and specs, and then adding excitement by offering features that everyone expects of Tesla plus a few features that nobody expected at all. I’m going to list the different features in 4 sections: Base, Expected, Innovative, and Unexpected. If you haven’t read my Pickups for Dummies article, read it now — it may help you understand this one.
These are like the ante when you play poker (which I don’t). You really need these functions or features to meet your customer’s basic needs or you are just going to be a niche product and sell a thousand a month to Tesla fans, but not really affect the pickup market.
- Seats: For a base cab, you need 2 to 3 seats; for a crew cab, you need to seat 5 or 6. I’ll be disappointed if Tesla doesn’t have a crew cab (at least as an option), since this is the hottest part of the market right now.
- Hauling capacity in the truck bed of 1,500 to 6,000 pounds, depending on whether Tesla wants to play in the half-ton market or the heavy-duty three-quarter-ton or full-ton market. Anything less than 1,500 pounds would be a huge disappointment. It doesn’t need more unless it wants to play in the other market.
- Towing capacity: Other pickups can tow up to about 13,000 pounds in the half-ton market or 35,000 pounds in the heavy-duty market. Anything less than 13,000 pounds would be a disappointment to me, especially after Elon said that it would have all the capabilities of Tesla’s competitors. Anything more would be great!
- Off-road capability: It doesn’t have to be market leading, but something better than the Model X. Some ground clearance. Option for off-road tires. Something more to satisfy me and the general market.
These are the features everyone expects a Tesla to bring to the table:
- Zero Emissions.
- Great fuel economy/efficiency. Low maintenance required. Product should have a quarter of the fuel costs of gas or diesel trucks.
- Over-the-air updates like all recent Tesla vehicles have.
- Full Self Driving option.
- Million-mile battery and motors. Tesla has already said the Model 3 motors are both designed and tested to last a million miles. I wouldn’t expect any less in a pickup. Tesla has announced it is working on a million-mile battery, why not use it in a pickup?
- Class-leading safety. The rollover risk with pickups is high, but modern EVs with skateboard design have such a low center of gravity they have very low rollover risk. I expect Tesla to emphasize safety, especially since many families use a pickup as a vehicle to transport their kids.
If Tesla doesn’t have anything else, it should be a success, but I’ll be disappointed, since that wouldn’t be enough to be Elon’s favorite vehicle yet.
These are features that are expected by some and not by others. They should really help Tesla get publicity.
- Acceleration and handling better than a base Porsche 911. This means 0–60 mph in about 4 seconds and good handling. Since Elon has promised this, it is expected by people that are paying attention.
- 10 year, million-mile warranty.
- 110/220 volt power.
- Air compressor on board to run tools.
- Air-adjustable suspension.
I think there is a good chance we will get at least one unexpected feature that hasn’t been hinted. Tesla’s security must be top notch. Apple’s, Ford’s, and the National Security Agency’s (NSA) all have had respective leaks. Tesla has really kept this product under wraps and I’ll be disappointed if there isn’t at least one feature (either on this list or not) that hasn’t been hinted or speculated about.
- Option for ridiculous ground clearance. Something like a meter.
- Cold air jets as they are making for the Roadster SpaceX package. This would be useful for crossing rough terrain. Just fly over it.
- Submarine mode that lets the truck drive fully submerged.
- Option for autonomous interior:
- No steering wheel or pedals.
- Mobile office desk and monitors.
- Seating not forward facing (lounge style).
- Bedding for sleeping on your way to the destination.
Value Proposition To The Prospective Buyer
Considering the discussion above, even if the CyberTruck comes in at a price a little higher than the prospective buyer in 2019 or 2020 was planning on paying, it makes it very tempting to just keep your existing vehicle for a little longer and wait for either the CyberTruck or the other truck manufactures’ response.
People buying a new vehicle usually do it for a combination of the following 3 reasons:
- Their vehicle is getting unreliable.
- Their vehicle is boring and they want something more fun or flashier to impress people.
- Their business or life has expanded and they are adding a new vehicle that isn’t replacing a vehicle.
Assuming Tesla is able to generate sufficient buzz with its CyberTruck (has Elon and/or Tesla ever had trouble getting free publicity?) and every prospective truck buyer in the world (or at least in the US, the land of trucks) hears about the ways that the CyberTruck is better, this announcement will cause some of those prospective buyers to stop and say, “maybe I should wait and see if Tesla can deliver this before I pull the trigger on buying a new truck.” Suddenly, the new features that Ford, GM, and Ram are promoting look like insignificant updates compared to the revolutionary and exciting product shown by Tesla.
What I’ll be watching during the unveiling is how many markets Tesla will freeze.
- The off-road market would be frozen if Tesla promised some fo the outlandish features I speculated about above.
- The work market will be sensitive to the announcements on fuel and maintenance savings, long life and warranties, hauling and towing capacities, onboard power and air, self-driving, and mobile office features. Full self-driving will let contractors and tradespeople do all their paperwork and scheduling on their way to the job site.
- The leisure and lifestyle market will be sensitive to style, brand, acceleration, handling, fuel and maintenance savings, full self driving, and safety innovations.
So, the prospective buyer, being confused and excited by this announcement, will do what people always do when they are shocked. They freeze up and do nothing until they can take some time to process the new information. This will cause them to just fix their existing pickup and live with it a bit longer (if they have one). If they don’t have a pickup and need one, they may just rent or lease one. Or maybe they will buy a used truck to minimize the depreciation impact that will occur when Tesla delivers the truck that changes or disrupts the market.
Ford, GM, and Ram have 4 major problems:
- They need to develop a product that is appealing to truck customers who have heard of all the great things that the CyberTruck can do that their trucks can’t do.
- They need to do that with a workforce that isn’t skilled in the technology they need, such as batteries and packs, inverters, control software, etc. But they have too many people in areas like engine design and transmissions who they can’t lay off because of union agreements.
- They have to finance this expensive and risky development of a radically new technology and massive workforce restructuring and retraining at a time when expected sales of their current and even next-generation pickups (if they were foolish enough to have invested in a next-generation gas or diesel pickup) are dropping like a rock.
- Debt is tied to the value of the cars and trucks they have sold, so if it drops suddenly, many customers might walk away from their underwater vehicles.
That’s what I call a “pickle.” What should they do?
Start on the transition, cut costs aggressively in the unneeded technologies, partner where they are too far behind, and start securing as much battery capacity as they can, because when you get your competitive EV pickup ready, it’s going to blow away your old truck in so many areas that you will need a lot of batteries to meet the demand.
It would be better for them if the transition happened gradually over many years, but that’s not how disruptions work once they reach a tipping point. It’s not an easy path, and depending on how the economy does, maybe not even a successful one, but I think it is the only path that has at least some chance of success.
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About the Author
Paul Fosse A Software engineer for over 30 years, first developing EDI software, then developing data warehouse systems. Along the way, I’ve also had the chance to help start a software consulting firm and do portfolio management. In 2010, I took an interest in electric cars because gas was getting expensive. In 2015, I started reading CleanTechnica and took an interest in solar, mainly because it was a threat to my oil and gas investments. Follow me on Twitter @atj721 Tesla investor. Tesla referral code: https://ts.la/paul92237