Last week Tesla launched the Cybertruck. I’m sure you have all seen it by now, but the design is extremely polarizing, and that may have been the intent. At a high-level, I think it is a worthwhile observation that few product launches create as much buzz as Tesla. Probably only Apple’s are in the same league where everyone is talking about them. When Apple launches a product, my kids and all their friends are keenly aware by the end of the day. Oddly the same was true with Cybertruck even though they all felt it was hideous. This buzz is certainly not an indicator of Tesla’s imminent success, but it is a part of Tesla’s brand lure that I think adds a competitive dimension to their company other automotive companies do not have.
The most pertinent commentary post-launch of the Cybertruck, in my opinion, is Elon’s willingness to take bold risks and challenge the status quo. You can argue, and you would be largely correct that the automotive industry has gone stale. This happens in mature markets and mature product categories, and when someone comes in challenges the conservative nature an industry has fallen into, I think it is a good thing.
Who is the Customer?
Who is the target customer for Cybertruck is the critical question. Honestly, the market for Cybertruck is not immediately obvious. Some of you who follow me on Twitter may have noticed that I am a new truck owner. I did a great deal of research and drove every 2019 model truck and landed on the F-150 for a variety of reasons. The F-150 is the best selling truck in America for a reason, and those reasons are not the same reasons someone would buy a Tesla Cypertruck.
While there is a market for people who use trucks more like a toy than a tool or utility, I’d bet those who buy a truck for utility is much higher than those who just use it as a toy or for vacation towing. While Tesla showed off some nifty features like being somewhat bulletproof and having windows that won’t shatter (despite the demo fail), those are nice durability features, but they did not show any features of utility the average truck owner would look value. This goes back to the key question of how practical Cybertruck is for the average truck owner. That being said, maybe the target customer is not the average truck owner, and that is certainly fine if that’s the case.
Tesla’s Impact on Automotive
Taking a step back and looking at the role Tesla is playing in the automotive industry. Regardless of what one thinks of Tesla overall, they are driving industry-wide change in a few good ways. The first, and perhaps most important, is the transition to electric. If anything, Tesla proved there is a market for electric cars, and every automotive company now has a roadmap and is accelerating that roadmap in some cases. From a sustainability standpoint, as well as a healthy earth standpoint, the automotive industry can not get to electric soon enough, and this change is finally underway.
Autonomy is another area Tesla is driving change. Ultimately, self-driving cars will be safer, more efficient, and better economically for cities and consumers. At the moment, it is tough to grasp the impact of autonomous cars on our future truly, and getting there will be challenging but worth it. Tesla is helping drive this change, and whether Tesla is around in 50 years or not, its impact will be known.
From conversations I’ve heard from friends at automotive companies, or who supply components to automotive companies, I’ve continually heard how worried many car companies are about Tesla. In public, these executives put on a more confident front, but Tesla is on their heels, and they know it.
While not perfect, or even close, Tesla is a case study in how to shake up a mature market. While not yet evident if Tesla is a disruptor or innovator, its presence is positive and for consumers.