Tesla’s Cybertruck Has a Huge Cowboy Problem
Can Tesla and Rivian convince practical Ford-loving pickup drivers to buy their futuristic machismo machines?
It just doesn’t make sense to buy a car, to hear Mike Canada tell it. “You gotta have a truck,” says the expansively bearded 64-year-old who owns a cluttered, sprawling antique and collectibles shop on the outskirts of Houston. “Cars can only get passengers from point A to B. Trucks can do that, too, but sometimes you have to haul something.” Canada himself owns two trucks — a 2002 Ford F-150 for a daily workhorse, and a low-mileage 1967 Ford F-100 for, well, just because.
Welcome to Houston, where the go-to vehicle has always been the pickup truck. The bestselling vehicle here, is by far a pickup — the Ford F-150 specifically — accounting for about a quarter of all new vehicle sales here, with most of the rest taken up by large SUVs categorized as “light trucks.”
The Cybertruck, of course, is the electric pickup theatrically introduced by Tesla CEO Elon Musk in November that looks like an armored mini-troop carrier from a dystopian sci-fi fantasy.
Texas as a whole grabs about one out of six of all pickups sold in the U.S. It’s not just buyers who love them. About two-thirds of the stolen vehicles here are pickup trucks, and three men were jailed in 2018 for forcing an elderly woman to buy them pickups. When famed automotive auctioneering firm Mecum held a big auction in Houston last April, they didn’t even bother to run cars through it, just trucks. So universal is the pickup here that it has become a municipal unit of measurement — the Houston city website describes the volume of trash it will pick up in terms of the space taken up by two pickup trucks.
Houston, of course, is a window into the rest of America, which last year bought more than 2.5 million pickup trucks, nearly a million of them Fords.
So what’s a good ol’ Houston-bred, loyal Ford truck owner like Mike Canada supposed to make of the futuristic Tesla Cybertruck? The Cybertruck, of course, is the electric pickup theatrically introduced by Tesla CEO Elon Musk in November that looks like an armored mini-troop carrier from a dystopian sci-fi fantasy. As it turns out, Canada isn’t ready to rule out buying an electric truck, from Tesla or anyone else. “I’d want to do more research, but I’d be open to an electric truck,” he says.
There, in a nutshell, is the possibility — and the massive gamble — looming over the auto industry. The interest in electric trucks is an opportunity for startups to invade the industry’s most lucrative market, and for incumbents to protect their turf. At the front of the pack, at least in terms of mindshare, is Tesla’s Cybertruck, an entry that reflects Musk’s signature strategy of trying to upend established competitors with flashy design and stunning specs. Ever the stuntman, Musk is already partially succeeding in trying to preempt and hijack the entire electric truck conversation.
But the Cybertruck — which is not expected to hit production until 2021 — already has a fleet of competition. At least three startups say they may have trucks out as early as this year. The one with the most potential for being a foil to Tesla is Rivian, founded over a decade ago by an MIT PhD, who will soon debut the company’s off-road pickup truck, the R1T. The Detroit-based startup has attracted a staggering $2.85 billion in investment, including an order for 100,000 electric delivery vans from Amazon, and $500 million from Ford for an EV platform around which it can build out its electric line.
Then there’s Bollinger Motors, also targeting the off-roading crowd with its Range-Rover-like electric pickup. The other contender is Atlis Motor Vehicles, which is aiming squarely at the more traditional segments of the market with a truck designed to match the hauling capabilities of conventional pickups. And with a splashy Super Bowl TV ad that cost more than $6 million starring LeBron James, GMC just declared it’s coming to play too, with its latent gas-guzzling Hummer brand soon to be reincarnated as an electric truck. “GM wants into this business,” says Tony Posawatz, the former GM executive behind the company’s first electric vehicle, the Chevrolet Volt, and now a car industry consultant. “They’ve been a conservative company, but now they’re ready to compete.”
America’s coasts may well harbor pockets of tech-friendly, eco-conscious early adopters eager to jump to a Cybertruck, or some other whizzy, cool urban-warrior or off-road vehicle. But Tesla and other startups won’t get far hitching their future to those sort of sub-sub-markets.
Still, most eyes are on Ford, which says it will debut its electric version of the F-150 next year, and has the clearest built-in audience of die-hards. “The Cybertruck may appeal to some younger buyers who have never owned a truck,” says Stephanie Brinley, principal automotive analyst at market research firm IHS Markit. “But Ford has a massive pool of existing F-150 owners to work with. Even if it only moves a small percentage of them to an electric version, that’s a lot of trucks.”
Right now it’s unclear electric pickup trucks will even take off, at least in the foreseeable future. Last year, only 330,000 electric vehicles were purchased in the U.S., even less than the year before. America’s coasts may well harbor pockets of tech-friendly, eco-conscious early adopters eager to jump to a Cybertruck, or some other whizzy, cool urban-warrior or off-road vehicle that happens to have a bed for hauling Whole Foods groceries and Patagonia gear. But Tesla and other electric truck startups won’t get far hitching their future to those sort of sub-sub-markets. They’ll need to figure out how to sell electric pickups in Houston and other places where trucks are king. Especially since, as Musk well knows, pickup trucks are the industry’s profit machines.
Tesla and its legions of boosters never tire of crowing that the company’s Model 3 is the bestselling luxury sedan in the U.S. To which the Big Three U.S. automotive manufacturers, if they were being open about it, might respond: Be my guest! Sedans are not only a low- or negative-profit segment of the car market, they’re a dying one, too.
Tesla has lost more than $6 billion selling electric sedans. (Its Model X is usually referred to as a crossover SUV, but it’s essentially a slightly swollen version of its Model S sedan.) For all the strides the company has made, attention it has won, and the dizzying heights of its stock which has boosted its market cap to surpass Ford and GM combined, it now commands a U.S. vehicle market share of a bit more than 1%. In part that’s because the U.S. market share of all companies’ sedans combined is a mere 28% and shrinking, notes Tyson Jominy, vice president of data and analytics for automotive industry research firm J.D. Power. “Tesla is playing in the shallow end of the pool,” says Jominy.
The Ford F-150 has racked up 30 years as America’s bestselling truck, and 20 years as the bestselling vehicle of any kind. This year could see the F-150 become only the second vehicle in U.S. history to hit a million units in annual sales, beaten to the punch only by the Chevrolet Impala in 1965.
Beefier SUVs and pickup trucks, on the other hand, are on fire. And while SUVs outsell pickup trucks, pickup trucks bring in bigger profits. Manufacturers don’t break out profit figures for product lines, but industry analysts estimate per-vehicle profits for Ford SUVs at around $10,000, and for its pickups at about $15,000. Multiply that $15,000 by sales of 900,000 to get to an estimate of $13.5 billion in 2019 profits that Ford derived just from sales of the F-150, its most popular truck — and its larger pickups are even more profitable on a per-vehicle basis. GM and Fiat Chrysler North America are said to be similarly dependent on truck profits.
It’s no mystery, then, why Musk is pulling out all the stops in trying to drum up interest in the company’s planned entry into the pickup market. Formidable showman that he is, Musk grabbed our collective attention for the dramatic unveiling at Tesla’s design studio just outside L.A. in November. Never mind that two demonstrations of the indestructibility of the Cybertruck’s shatterproof glass windows resulted in, well, two smashed windows. Drooling among Tesleratis ensued: Impressive performance specs and jacked-up design that might appeal to a “sci-fi-obsessed billionaire who shuttles between Los Angeles and Silicon Valley” led to an immediate flood of 250,000 $100-backed orders.
Meanwhile, Ford’s potential pitch for an electric F-150? “When someone comes in for a Ford truck, it’s because that’s what their buddy drives, it’s what their dad drives, it’s what their granddad drives,” explains Gabriel Smart, who sells a lot of trucks at mega-dealership Planet Ford in Houston. “So that’s what they want to drive, too.”
The results speak for themselves: The F-150 has racked up 30 years as America’s bestselling truck, and 20 years as the bestselling vehicle of any kind. This year could see the F-150 become only the second vehicle in U.S. history to hit a million units in annual sales, beaten to the punch only by the Chevrolet Impala in 1965. If you include the F-150’s predecessor, the F-100, it tops the Ford Model T to rank as the most-sold vehicle in America ever, period.
There are three ways Tesla typically seduces electric sedan buyers — either through their wallet (gas savings), their conscience (emissions), or their ego (no explanation necessary). Truck buyers, on the other hand, worship only one thing: hardcore specs.
When an online car-buying website Autolist did a survey of 1,100 car and truck owners, it found that about two-thirds of those who have ever owned a truck say that if they bought an electric pickup, it would likely be from Ford or GM. Brandon Christ, who runs a dry-cleaning-equipment repair business in Houston and is looking for a pickup to replace his Dodge van, insists most Ford truck owners are going to feel that same way. “The more an electric truck resembles what Ford truck owners have been buying, the better it will do,” he says. “They aren’t going to switch brands.”
Ford has announced it will debut its electric F-150 by 2021, but little is known about what it will offer in capabilities, range, and price. And the company seems determined to stay mum for now. (Ford refused to provide an interview for this article, but a spokesperson emailed a statement: “We won’t be sharing more details.”)
The automaker will likely have an easier time than most converting its native demographic to go electric — but whether it will actually want to is the bigger question. Batteries in an electric truck will cost three to four times more than a typical F-150 engine, which goes for about $7,000. “Right now the truck has a hefty profit footprint, but adding in an expensive electric-vehicle powertrain would greatly deteriorate that profit,” says J.D. Power’s Jominy.
But Ford might have little choice. A huge leap in gas prices, battery technology advancements, or new regulations could end up pushing the large-scale adoption to electrics sooner than expected. If the electric F-150 that Ford introduces is little more than a sophisticated head-fake, it risks losing its next generation of would-be buyers to the Teslas and Rivians. Auto researcher Brinley puts it bluntly: “Ford can’t sit back and wait for 2030.”
There are three ways Tesla typically seduces electric sedan buyers — either through their wallet (gas savings), their conscience (emissions), or their ego (no explanation necessary). Truck buyers, on the other hand, worship only one thing: hardcore specs. “Truck buyers are more sophisticated than car buyers in what they’re looking for,” says Posawatz. “They look at their truck as a tool.”
The specs on the Cybertruck aren’t exactly shabby. (They also likely presage those we can expect to see on other manufacturers’ electric trucks coming out over the next two years). With gas savings and drastically reduced maintenance costs — electric trucks have only a few dozen moving parts, versus the thousands of parts in a conventional truck — it has a lower cost of ownership. Ben Sullins, a data analyst who runs the “Teslanomics” channel covering green technology on Youtube, analyzed the five-year total costs of owning a Cybertruck versus a traditional Ford F-150, determining that the Tesla truck would save close to $20,000. “Lower operating costs go a long way for small businesses and contractors and other truck owners,” says Jominy.
Then there’s horsepower, the kind that presses you back into your seat as you leave that wimpy Corolla behind at the stoplight. A higher-end 2020 F-150 can reach up to 450 horsepower, which makes the truck faster than some ’90s-era Ferraris (plenty of owners also trick out their trucks with after-market modifications that can jack the engine up to 750 horsepower). But even that almost absurd level of power won’t match the stock Cybertruck, which claims to put out 800 horsepower. Because electric motors are more efficient, they can handle a big surge in energy from a big battery — and do so instantly with a stomp on the accelerator.
The other critical tool for pickup owners is the ability to haul sizable loads, like towing a boat, a trailer carrying equipment for construction or landscaping, or a camper, which are owned by more than 1 million Americans. To hear Tesla enthusiasts tell it, that’s a big potential selling point for the Cybertruck, which Musk touts as providing the muscle to tow 14,000 pounds of trailer, 500 pounds more than any stock F-150. (To drive the point home, Musk circulated a video of a Cybertruck effortlessly dragging an F-150 in a tug of war.)
But towing and hauling are actually big problems for electrics, because doing so with even a modest load can drain the batteries quickly. RV Travel, an online newsletter serving recreational-vehicle owners, calculated that a Cybertruck towing a typical RV-style trailer would have to stop every 72 miles to recharge. For workers, haulers, and towers, going out of the way to find a charging station, then killing time while the truck charges, might be out of the question. And overnight charging could be impossible on longer trips that require a stay away from home base.
Most of the other electric truck startups aren’t likely to do much better than the Cybertruck when it comes to towing and hauling either. For example, the R1T by Rivian will offer only half the payload capacity of a Ford F-150. Meanwhile, Detroit-based upstart Bollinger, rather than trying to compete on haul, is targeting the niche off-road market, offering removable windows and door panels for an open-air experience. “Most of the questions I get about our truck have to do with towing,” says founder and CEO Robert Bollinger. Until the towing-range problem is solved, he says, “it’s the big, dark cloud hanging over the story of electric trucks.”
Atlis, the Mesa, Arizona, maker of the forthcoming B2 electric truck, hopes to outpace them all. The company’s pickup, planned for a 2021 introduction, will tow up to 17,000 pounds and haul up to 5,000 pounds, and even under a modest load will offer a range of 300 miles, says founder and CEO Mark Hanchett. (It turns out there’s no technological breakthrough, just a really big battery, which, of course, takes even longer to charge.)
If “range anxiety,” or the fear of running out of juice, is scary for car buyers, it’s going to be a showstopper for many truck drivers. Pickups are often used in construction, delivery, repair, landscaping, and other lines of work that can include a potentially battery-draining stream of not-always-predictable all day long trips into the evening.
Tesla defenders respond that even though the Cybertruck is a better hauler, most pickup owners don’t actually do much towing or hauling. And they’re not wrong. In a large survey of new-vehicle owners, automotive research firm Strategic Vision found that three-quarters of truck owners say they don’t tow more than once a year. The vast majority of pickups aren’t used regularly on the job, other than for commuting.
But that reality doesn’t matter. Most owners of high-performance cars don’t go around drag-racing at 120 mph, but still want the performance on tap. It’s the same for truck owners and hauling. “Pickup owners want those capabilities, even if they only use them once a year to help a family member move a table,” says IHS Markit’s Brinley. “If an electric pickup doesn’t deliver those capabilities, they won’t break through to a mainstream market.”
Ultimately, the biggest barrier to get truck drivers hooked on EVs isn’t a feature. It’s largely the same challenge that has vexed overall EV market penetration: the ridiculously small number of charging stations.
The vast majority of Americans don’t like the idea of a vehicle that can’t be easily refueled when it’s running out of energy. “People are used to having a gas station within a stone’s throw of wherever they are, any time they need it, and filling up in five minutes,” says IHS Markit’s Brinley. “How do you convince them to shift from that to having to plan your trips around charging stations, and then when you get to one having to wait half an hour for one to open up, and then to have to hang around at a mall for a few hours while it charges?”
Electric-vehicle owners have had to train themselves with new behaviors, such as overnight charging at home, that help avoid that sort of inconvenience. But the threat of drained batteries is enough to keep the combined share of all plug-in electric vehicle sales in the U.S. below 2% — and that share may shrink a bit in 2020, says Jominy.
If “range anxiety,” or the fear of running out of juice, is scary for car buyers, it’s going to be a showstopper for many truck drivers. Pickups are often used in construction, delivery, repair, landscaping, and other lines of work that can include a potentially battery-draining stream of not-always-predictable all day long trips into the evening. Plus, batteries of any size hold less charge when they’re cold, and can be damaged if a truck is parked in the hot sun for long — just the kind of fussy limitations that truck owners hate.
There are plenty of charging stations in and around San Francisco, Boston, and other hip coastal cities. But not so much in the very heartland regions where trucks rule, and where they tend to be driven on the longest trips. “There’s no real charging infrastructure in Montana, and there won’t be one put in any time soon,” says former GM exec Posawatz.
There are currently only 20,000 charging stations in the U.S., powered by Tesla and an emerging industry that includes EVgo, ChargePoint, and Electrify America. But that’s still minuscule compared to the 170,000 gas stations that dot our roads. Until revenue proves there’s enough demand, expensive charging stations will have a difficult time scaling.
Electric truck startup Atlis is betting that charging stations will become more ubiquitous and more powerful. Its massive batteries — the ones that enable towing up to 17,000 pounds — require longer charging times. Atlis CEO Hanchett believes that chargers will eventually deliver more than 1,000 kilowatts, compared to the 150 kilowatts available today. “It’s a 10-year vision,” he concedes. “But we’re building a truck for it now because otherwise, it’s a chicken and egg problem.”
Price tags, too, are going to get truck buyers thinking twice before going electric. J.D. Power’s Jominy predicts that though the Cybertruck base price has been announced at $40,000, the fully equipped version that most buyers will want will bring the price to over $50,000. That would place it in the price range of some of the Big Three’s toughest, most popular, best-equipped trucks that also happen to offer low-cost, long-term financing, making monthly payments significantly lower than anything Tesla buyers are likely to end up with.
But the Cybertruck could end up being the cheapest of the electrics. (Bollinger is planning to price the B2 pickup at $125,000, and most of the planned electric-pickup entries are expected to be priced in the $50,000 to $100,000 range.) The entire electric-pickup industry will be lucky to build up to annual sales of 50,000 trucks through the next several years, says Posawatz, noting that’s a drop in the bucket compared to the 3 million pickups sold in the U.S. every year. “Lots of other truck buyers will be curious, but they’ll take a wait-and-see attitude,” he says. “They’re just too conservative to take the leap.”
It will be up to Ford to see if it can bridge that gulf, and risk cannibalizing its golden goose with a game-changing electric offering. One lingering question is the role that Rivian—the startup they invested $500 million in—might play in Ford’s F-150 entry. The carmaker is expected to rely heavily on a Rivian platform for much of its future EV line, but the extent to which the F-150 will be a Rivian-based product isn’t clear. Even if the F-150 does owe much to Rivian, it will likely be chasing two different customers: the Rivian R1T is a smallish truck that appears aimed mostly at affluent buyers who want to take the truck off-road, while the F-150 would be a meat-and-potatoes pickup option.
The one thing we can expect is that Musk and the other upstarts will continue pouncing on early adopters while waiting for Ford’s big electric F-150 reveal. Atlis’ Hanchett is among those who predict Ford will play it safe. “They’ll come out with a product that’s just enough to block Tesla,” he says. “That will be their downfall.” If the startups can find a way to court the real truck customer — not just the one they are fantasizing about — that sort of lackluster entry from Ford could give them a hole big enough to drive a truck through.