Style Pundits Missing the Boat on the Tesla Cybertruck
There is not shortage of opinionated writers online eager to provide us with their overthought analysis of the Tesla Cybertruck.
They are fixated on the style of the Cybertruck and eager to tell us just how profoundly wrong and stupid Tesla has been to choose it. We are told how the typical truck driver is very traditional and how the Cybertruck only appeals to tech geeks in Silicon Valley and not to rural America with down-to-earth guys wearing caps and big beards.
The Cybertruck they tell us, is a solution to a problem nobody had. What is frustrating in reading these pieces is how utterly shallow the analysis is.
Me-too Products Don’t Sell
First of all these style pundits seem to have failed to see the most obvious problem with the kind of strategy they envision Tesla should have followed. Their argument is that because truck drivers are traditional, Tesla should have opted for a traditional design and not rocked the boat.
This makes you wonder, have they ever heard about me-too products? Years ago I remember the CEO of the company I worked for then being presented with a flow meter. The engineers went through the specs and what they could sell it for.
At the end our CEO said: “So you are proposing a device with exactly the same capabilities as our competition, which are already in the market and 50x bigger than us? Why would any sane person buy our product?”
He was right. As the underdog you cannot sell what everybody else offers. It has to be radically better. So they went back to the drawing-board and eventually we pushed to market a much better product that captured 90% of the market.
This is an old story. Microsoft Zune was a me-too product. It was slightly better than iPod but iPod was a big name and had a huge head start. Zune failed.
Windows Phone was a repeat of much the same failure. A Phone that was not radically better than iPhone or Android and which was late to market. It failed.
Elon Musk understand this obvious fact. No Tesla released has been an attempt at being equally good as a gasoline car expect having batteries instead. That would have ben a complete failure. You are at a huge cost disadvantage when you start selling EVs. Batteries are far more expensive and you produce in very low volumes compared to the competition.
Hence if Tesla was going to sell cars, they have to be radically better than the competition in not one but many areas. That is why the Model S had:
- More storage room than any other car of the same size.
- Significantly better acceleration.
- More advance infotainment system.
- Better styling and design (okay that is subjective).
- Better safety.
Basically he was offering a sedan, a sports car and a tech gadget all in one. It was a bit like how the original iPhone was an iPod, a Phone and an internet browser all in one.
Tesla had to hit several areas that people who drive cars care about. A lot of people naturally care about safety because they drive with their children in it. Tesla delivered on that. But they also managed to give the family man who had to get the sensible boring choice for his family, an opportunity to also have something that felt like a supercar, with its crazy acceleration and good handling.
But this receipt for success would not work for a truck. You cannot charge premium prices for a truck because it has better acceleration, more collision safety and better infotainment.
Say Tesla had designed the truck like a regular truck, that means body-on-frame and traditional truck shape. Body-on-frame would have wasted a lot of space and weight. To all that weight they would have add heavy batteries. Heavy truck with high air resistance would have meant very poor range.
What Tesla would have ended up with, would have been a Truck looking like any other truck but with worse performance in every area that matters to truck drivers: less storage space, less load to pull. In addition truck owners would have to deal with some big negatives such as much shorter range.
In addition low volume would have meant higher price than the competition. Why would anyone buy a less capable truck at much higher price from a relatively unknown car maker in the truck segment?
The would not. The style pundits simply have no clue what they are talking about because their shallow analysis only takes look into consideration. They are not looking at the big picture.
You cannot sell a truck that looks the same as every other truck but has worse performance and comes from an unestablished truck maker. Sure some truck competitors are trying to do just that. You got the Rivian and Bollinger trucks. However both of these trucks hit exactly the problem we have talked about.
Rivian takes half the payload of Cybertruck and tows about the same as a regular truck. Basically Rivian doesn’t beat a regular truck in anyway way except being far more expensive. Bollinger is in a narrow niche at a really high price point without any kind of big screens or self driving capabilities.
What Strategy To Pick?
Style pundits have to ask themselves, what is the better strategy?
- Look like a regular truck but offer less capability at higher price?
- Look completely different but offer more capability at lower price?
Truck drivers may be conservative but there is no way a large fraction of them will pick option 1. Strategy 2 is a big gamble but it actually has a chance of success and mass market adoption.
If playing it safe is your preference then you should not be in the EV industry in the first place. It is a big risk. You huge disadvantages that you have to circumvent by either removing them or offering something else compelling enough to make people accept the downsides.
Elon Musk went into the EV industry expecting failure. Ponder that for a second. He assumed he would fail. So why did he do it? Because he thought trying something important is more important that succeeding at something that doesn’t matter.
Who thinks that kind of person is going to play it safe to eke out some niche in the market? No, Elon Musk wants full electrification of transport industry and that means winning the mass market. You cannot just sell to eco-conscious hippies willing to pay a premium for the same car as everyone else.
That is why Tesla from the get-go was all about finding ways of beating gasoline cars big time. As Elon Musk said about the new roadster, it is a smack down on the ICE car. He wants to change the narrative from EVs as small underperforming golf carts to be in the minds of all people superior vehicles in every way. He wants gasoline cars to look old, outdated and ready for retirement.
If Tesla picked the boring strategy they would be competing with other EV makers and that is not the point. The point is for the whole EV industry to outcompete ICE cars not each other.
People who don’t want the crazy looking Cybertruck will have an option. They can pay a premium and get the Rivian. Making a Rivian me-too product is pointless.