How The Tesla CyberTruck Puts Ford, Chevy, & Ram In A Pickle
Credit to Author: Paul Fosse| Date: Thu, 21 Nov 2019 02:10:35 +0000
Published on November 20th, 2019 | by Paul Fosse
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.
Image courtesy Ford media center.
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.
These are the features everyone expects a Tesla to bring to the table:
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.
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.
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:
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.
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:
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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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