In the ever-evolving landscape of electric vehicles (EVs), the Cybertruck by Tesla (NASDAQ: TSLA) has continued to capture the attention of automotive enthusiasts and industry observers. Unveiled with a characteristic flair, the Cybertruck has been touted to carve a distinct niche in the market, recording a consistent stream of reservations at an impressive rate, indicative of a substantial demand for this unique offering by Tesla.
In this line, data acquired by Finbold indicates that as of July 2023, the estimated number of Cybertruck reservations stood at 1,943,876. This value represents a growth of nearly 80%, equivalent to 859,676 reservations, compared to the figure of 1,084,200 in May 2021. This translates to an average of approximately 1,102 Cybertruck reservations daily over the past two years.
Moreover, these reservations align with Tesla’s delivery patterns for its other vehicle models, which have consistently risen. In 2022, the electric vehicle manufacturer achieved a significant milestone by surpassing the one million mark in deliveries for the first time, reaching a total of 1,313,851. This reflects a growth of 40% compared to the 2021 figure of 936,172. Therefore, the latest reservation count has surpassed the amount of Tesla deliveries in a single year. Notably, between 2019 and 2020, the company delivered 866,750 vehicles.
Understanding Cybertruck’s unprecedented reservations
The sustained buzz around the Cybertruck is primarily attributed to its disruptive nature. Electric vehicles have gradually gained traction in the market, and the Cybertruck represents Tesla’s audacious attempt to infiltrate the traditionally conservative pickup truck segment. Its promises of exceptional range, impressive towing capabilities, and acceleration could rival high-performance cars and allure to a broad spectrum of consumers. Crafted to shatter the conventions of a standard pickup, the electric truck boasts an unconventional triangular form and the pledge of a bulletproof exterior.
The high interest in the Cybertruck also stems from Tesla’s reservation conditions, which require a $100 refundable deposit from customers. Initially targeting North America, Cybertruck’s appeal grew after Elon Musk suggested adapting it for international markets. For instance, to meet European safety regulations, the Cybertruck model will be altered to suit the region’s needs, addressing concerns about pedestrian safety standards.
It’s important to mention that real-world sightings of the Tesla Cybertruck have sparked enthusiasm among potential customers. These early sighting situations before a Tesla launch are customary and tend to intensify anticipation. Leaks from the factory and other incidents have gained attention in recent months, and these sightings have further heightened the excitement. This is particularly true after years of waiting for the truck to begin production.
Notably, Tesla announced the production of its first Cybertruck in its Austin Gigafactory. Despite the production news, reservation holders will have to wait longer, considering that Tesla plans to embark on mass production of the truck in 2024, extending the wìait for most customers. This deviates from the mid-2023 production target that was set in Q2 of last year. Musk has since acknowledged slowed production at the start.
Investors are placing their bets on the anticipation that the Tesla truck will not only be worth the wait but also infuse a fresh wave of excitement into the Tesla brand. This is especially significant as Tesla’s current lineup is comparatively older than its competitors. While the truck’s release has been a long time coming, its potential impact on Tesla’s profit margin is a reason for optimism.
Production delays
It is worth noting that Tesla did not initially provide a clear production plan with the vehicle still undergoing engineering. Indeed, as the reservations piled up, Tesla initially faced challenges in the production of the Cybertruck. Despite its initial 2021 target, the Cybertruck encountered immediate obstacles after its November 2019 debut. Certain industry analysts have expressed concerns that its distinctive design might not resonate widely with potential buyers.
The truck’s design has led to persistent manufacturing challenges. Internal documents exposed by a Tesla whistleblower highlighted issues like leaks, vibrations, and noise, contributing to delays attributed to the use of stainless steel. This particular material demands higher shaping pressure, potentially resulting in edge deformation.
Subsequently, the disruption caused by Covid-19 in global supply chains prompted Cybertruck to take a step back, prioritizing more assured ventures aligned with Tesla’s market expansion and financial objectives, according to insiders. The production, however, ramped up with the Texas giga factory being added as a Cybertruck production facility.
Will reservations translate to sales?
The pivotal question remains if the reservations can translate into actual sales. Notably, multiple factors raise skepticism. American truckers’ reluctance towards electric vehicles is rooted in demographic disparities compared to the typical urban/suburban buyer. The challenge of crafting EVs that resonate with traditional truckers pervades the industry, given this group’s general lack of interest in electric vehicles.
Notably, the landscape of the electric vehicle market has transformed. Once the pioneering force in the electric car sector, Tesla now faces formidable competition from traditional automotive giants and emerging startups that have ventured into the realm of electric pickups.
While Tesla has held the advantage as an EV manufacturer, its entry into the truck-making domain likely puts it in a follower’s position, behind companies like Rivian (NASDAQ: RIVN) and Ford (NYSE: F), who have already entered the market with their offerings. Therefore, the success of the Cybertruck will like to offer Tesla a competitive advantage.
Featured image is courtesy of Tesla, Inc.
