If reports are correct that the start of initial production of the Tesla Cybertruck has been delayed until early 2023, this news is a gift to Detroit automakers. The Ford F-150 Lightning EV pickup is slated to arrive in early 2022. Chevy’s Silverado EV pickup is scheduled to be available in mid to late 2023. And the Stellantis company Ram 1500 electric pickup will arrive in 2024.
There are no more important ‘cash cows’ for Detroit 3 automakers than their pickup truck franchises. My assumption is that the EV versions of these revenue and profit generators will extend the significance of these models for each company, particularly in the all-important U.S. market where Ford, Chevrolet/GMC, and Ram sold 2.1 million full-size pickup trucks in the U.S. in 2021.
To allow Tesla (the only EV automaker that has scaled electric vehicle volume) to have a head start at scaling production and sales in pickups, could be insurmountable for Detroit. Tesla’s delay of Cybertruck gives Detroit automakers a better chance at driving favorable opinion of their EV pickups without the noise generated by Tesla and Cybertruck impacting those efforts.
As for Cybertruck itself, I never believed the vehicle as revealed in November 2019 would be produced ‘as-is’ by Tesla. There are many design elements of the truck that would seem to hinder volume production as well as challenge its legality in certain markets. More importantly, Cybertruck is a design I like to call, “fugly.” I think the vehicle is hideous and comical. Any legacy automaker introducing that design would be ridiculed. It seems Tesla tends to get the benefit-of-doubt when it comes to EV designs. However, Cybertruck as designed, would not have the long-term mass appeal beyond the initial ‘fanboy’ orders and early Twittersphere reaction.
Tesla’s decision to delay Cybertruck might also be long-term valuable for the company as well. A less comical, slightly more traditional truck design might be more beneficial for the company’s long-term success. We know Tesla has a core competence in design. The Model S is gorgeous, still. The Model 3 sedan is decently styled. The Model Y SUV is ok - a little frumpy-looking, however. The Model X is even frumpier than the Model Y, with entirely over-designed (and practically useless) falcon wing rear doors. Hopefully, a revised Cybertruck design might drive the company’s valuation higher.
Even with the delay of the comical Cybertruck, I remain a long-term investor in Tesla, a taGMan portfolio stock. And while I still believe General Motors (another taGMan stock) is the best positioned legacy automaker to profit from EVs, I’m a little more concerned about the timing of the 30 new EVs GM is planning to introduce by 2025.
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“The implications for us are clear….we will continue to try to ‘know the knowable’ -- that is, to work in markets which are the subject of biases…and in which it is possible to obtain an advantage through hard work and superior insight.” - Howard Marks, Oaktree Capital Management
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TaaSMaster, LLC is not a registered investment advisor or broker/dealer. All investment opinions expressed by TaaSMaster, LLC are from personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors may occur.