Introduction
Unveiled earlier this month, Cybertruck continues to be the talk of the world. I went to the LA Auto Show days after the event and saw unique concepts from major automakers but went home thinking mostly about the Cybertruck, even though it wasn’t at the auto show. As of writing, the Tesla (NASDAQ:TSLA) Cybertruck received 250k pre-orders; pretty good.
There’s one problem with the truck, though, and it’s not the glass or the looks.
What would have really hurt Ford, GM, and FCA
There were hundreds of thousands of people tuned into the live stream unveiling of the Cybertruck, likely including executives of major US automakers. Due to the broken glass and overall poor presentation after the fact, Tesla removed the video from their YouTube channel so we don’t know how many times it’s been viewed, but Tesla unveils typically get millions of views. Re-uploads of the event are in the millions and YouTuber coverage around the truck has certainly received viewership in the tens of millions though.
I’m sure executives from Ford (F), General Motors (GM), and Fiat Chrysler (FCAU) were watching at the edge of their couches because not only is Tesla disruptive, it’s also exempt from the chicken tax.
People were quick to note how the unique design of the truck made executives breathe a sigh of relief, but in reality, the relief came after discovering that the Cybertruck would be limited to being a six-seater pickup truck, albeit a capable one.
If it followed the suit of Ford, GM, or FCAU’s customizable body on frame design, the Cybertruck could have been a highly profitable, low-risk game changer.
Unibody Design
Unlike most modern truck with the exception of the Honda Ridgeline, the Cybertruck uses a unibody design, which simply means that the body of the vehicle is a part of the chassis. The images below give you an idea of the difference.
The benefits of a unibody design are that it can be both lighter and stronger, which is important especially for an electric vehicle. However, without going into detail such as towing restraints because Tesla obviously stomped those expectations, the biggest disadvantage for a unibody design is customization.
With a traditional body on frame design, a manufacturer can build anything that a customer wants. It can make it a single/double cab, or a long/medium/short bed. It can even sell a stripped chassis to another manufacturer that could go on to convert it into a shuttle bus, school bus, motorhome, food truck, ambulance, FedEx delivery truck, or whatever a customer’s specific needs are. All without needing to design a new chassis for each application.
Tesla’s Cybertruck will still be desirable by customers. It looks cool, it’s unique, it’s electric, and it’s a very capable truck. However, the Cybertruck is limited to being a 6-seater pickup and it could have been so much more.
Building the App Store
Ford pickup trucks are popular, but Ford doesn’t disclose exactly how many F-Series are F-150 pickup trucks that are sold at dealerships. An F-Series can be a two-wheel drive F-150 that can only tow 7,500 lbs or a Super Duty F-450 that can tow north of 30,000 lbs.
Based on the year-to-date sales of an F-Series truck, these trucks are more than 3-times more common than a Honda Civic in the US (Civic sales, F-Series sales). I know that the trucks are popular and that the F-150 is the leader of the bunch, but it makes more sense when you consider that an F-Series truck can be anything from a normal pickup to a shuttle bus. Further, an F-150 has 3 cab and 3 bed configurations. It’s the same story for the other brands.
The F-Series is a platform that others can build upon and create whatever their heart desires, whether it be a tow truck, motorhome — you get the point. It’s like Apple’s (AAPL) App Store. Apple built the iPhone and the App Store, and others built Uber (UBER), Snapchat (SNAP), Facebook (FB) and others. It’s one reason why it’s so profitable for Ford.
Ford doesn't have to build shuttle bus seats or worry about ambulance equipment. Ford just needs to make sure it has the right engine requirement and chassis length/strength for a customer's needs.
The Cybertruck can't be customized in any such way without redesigning the entire chassis for each application.
A customizable chassis by Tesla would be a game changer
Forget the semi truck. If Tesla built a box frame customizable chassis with a 100-200kWh battery with single, dual, or triple motor configurations, third-party manufacturers would probably go crazy over this. UPS (UPS) and FedEx (FDX) could have low-cost electric delivery trucks or vans built to their specifications. This would even hurt Amazon (AMZN), which has poured hundreds of millions into Rivian and ordered 100,000 vans; that's how badly an ICE alternative delivery truck is desired. Shuttle buses, school buses, motorhomes, ambulances, and so much more could benefit from a low-cost (long-term), efficient, and reliable all-electric design.
When it comes to the battery and powertrain, nobody comes close to Tesla. Anyone who thinks otherwise lacks an understanding of Tesla’s capabilities and the Ford Mustang Mach-E is the perfect example.
In order to get 300 miles of range, Ford needed to use a 98kWh battery pack with a low-performance motor that takes over 6 seconds to reach 60mph. (Can't haul anything useful with that weak motor). When Ford added performance to the equation with the GT trim, range dropped to 250 miles.
Tesla gets over 305 miles with the larger 2.5-ton Model X that can do 0-60 in 2.7 seconds. Even the Model 3 performance gets 310 miles with a much smaller 80kWh battery.
Not only is Tesla able to provide optimal efficiency, it can attain high efficiency without compromising performance.
Any other automaker that has made a high-performance EV has sacrificed range to do so. The E-Tron gets 204 miles, the I-Pace gets 234 miles, and the Taycan Turbo gets less than 250.
This is why Tesla is capable of making a fully electric semi truck prototype. A semi truck is an ambitious project; perhaps if Tesla toned it down with something simple such as the Ford F-Series and let other manufacturers build the custom specs for companies like UPS, this would be a very simple, yet profitable venture for Tesla.
Other concerns about the Cybertruck
There are other concerns regarding the truck. After all, Tesla has unveiled the Roadster, the Semi, the Model Y and Cybertruck without having brought any of them into production yet. The last time we saw Tesla bring a new model into production, it nearly bankrupted the company.
Fortunately, the Model Y will go into production soon and its similar design to the Model 3 will likely prevent any major mishaps. However, most other products remain a mystery, especially the very angular and unique Cybertruck.
New materials, same cost as Model 3
As standard, the Cybertruck features transparent metal for glass, cold rolled 30X steel, an air suspension, and a price point that’s similar to a Standard Range Plus Model 3. The Model X, which is made primarily of lightweight aluminum weighs 5,500lbs. The Cybertruck will likely weigh well over 6,000lbs; maybe over 7,000? Without a breakthrough battery design, Tesla will have a hard time keeping the Cybertruck light while avoiding large, heavy and expensive battery packs.
Safety
The planar design and dent-proof steel also brings into question safety. Are the corners too sharp? Is there a crumple zone for the Cybertruck, or for pedestrians? What if a motorcyclist clips the corner? Based on Elon’s tweet, the reason for the planar shape is because the metal is so strong it would break a stamping press.
An expensive venture
This is some tough steel and will likely require new and costly manufacturing processes. I would expect such a venture to be hundreds of millions; more likely billions. Unless the Cybertruck is very successful, it would take a while to receive a return on investment for all of the spending on R&D, factories, and tooling equipment required for the truck. It may even need a new factory because I'm not sure where it will be built. Can't be built in Europe (GF4) and China (GF3) and be imported to the US without paying a chicken tax. I would guess GF1.
Reservations
By the time you read this, Elon will likely have tweeted a higher number, but as of now, the Cybertruck reservations are at 250k. That's extremely impressive, but it's really hard to gauge how successful that is. Model 3 reservations were at 325k after a week but had a $1,000 requirement instead of $100. Model Y is at $2,500, but Tesla has not stated how many orders there are for Model Y. There are in fact many people that are publicly stating that they are ordering multiple Cybertrucks to lock in price fluctuations, make up their mind later, or to get the dual motor first and then a triple motor later. I saw on Reddit someone posting a video on why you should order 5 Cybertrucks. While it's hard to gauge the interest, 250k is not a small number; it's at least a $25 million interest free loan.
Conclusion
The Cybertruck is cool, unique, powerful and different. I love it and hate it at the same time. It's probably the most-talked about car in history and its polarizing design is gathering the attention of probably hundreds of millions; all for free.
Tesla seemed focused on targeting the specs of a Ford F-150 while ignoring the fact that the Ford F-Series is a platform for almost any consumer and commercial vehicle. Not only can the F-150 have 3 cab and 3 bed configurations, the F-Series serves as a basis for many other vehicles. If Tesla built a simple truck with a customizable body-on-frame design and gave other manufacturers the option to purchase a stripped chassis, major US automakers would have been in big trouble. Really big trouble.
Tesla’s leading powertrain and battery technology could have been leveraged by third-party manufacturers to create buses, food trucks, delivery trucks, delivery vans, motorhomes, ambulances, utility trucks, tow trucks, and so much more.
Instead, it’s just a really cool, highly capable pickup truck. As a consumer, bravo; as a shareholder, it's a worry and likely another risky venture to endure.
