Are Tesla Cybertruck, Mustang Mach-E Moving the Needle Toward EVs?
The Los Angeles Auto Show/Automobility last month was a coming-out party for EVs targeting the US market, currently still below 2 percent of sales. Audi, BMW, Hyundai, Mercedes, Toyota, Volkswagen, and others announced or showcased electric and electrified vehicles. All were overshadowed by the introductions of the Ford Mustang Mach-E and the Tesla Cybertruck.
But will these two controversial, high-profile vehicles set off a rush toward EVs? They will generate heated discussion. The Mach-E should do well, as well as an EV can do circa 2021. There are lots of questions about the viability of an electric pickup truck, how much pickup buyers are seduced by the Tesla name, whether Tesla can turn any profit on Cybertruck, and if the wedge design will be changed as it moves toward production.
Tesla is well past 250,000 pre-orders, but the deposit is just $100, for a truck that goes into production – Tesla says – at the end of 2021, with the most powerful, three-motor, version in production in 2020 – again, Tesla says. Tesla has a history of shipping late. Tesla has taken deposits of up to $250,000 for the Roadster 2.0, a limited production vehicle yet to ship. The deposit amount has been $2,500 for the Model Y compact crossover and $1,000 for the Model 3 sedan, currently Tesla’s best-seller. It may be the low-deposit price generating large numbers of potential customers appeals to investors.
There are lots of other questions about Cybertruck: How easily can a stainless steel body be painted? (Not hard, with proper prep work.) What will it look like with side mirrors and headlamps? How much more will it weigh than a traditional pickup – 1,000, 2,000 pounds more?
Critics Have Been Unkind (Again) to Tesla
“Tesla’s ‘Cybertruck’ looks like the kind of vehicle that The National Guard would have used at Kent State University in May 1970,” says Anton Wahlman, an industry analyst writing in The Street. “Imagining these Cybertrucks roll down the streets of America will definitely give the impression that martial law has just been imposed, and that you are supposed to shelter in place while the government comes to arrest protesters.”
Wahlman is short TSLA stock (he’s betting the price will go down) and adds, “Once you buy into the Tesla image realignment from flower-power greenie to military occupation [style truck], there are many practical questions that have to be answered:
1. How much will it cost to manufacture this truck? $100,000 or more like $200,000? Clearly at the advertised prices — as low as $39,900 — this will lose a lot more than any Tesla that came before it. If that’s accurate, then it’s the biggest flaw of them all.2. The 500-mile range for the high-end version obviously is totally unrealistic given the weight and cost of the batteries that would have to be involved.3. The usual Tesla questions: Testing, durability and quality? Experienced vehicle manufacturers take many years to sort that out.
Research analyst Sean Chandler in Seeking Alpha says the Cybertruck’s unibody construction is a detriment to traditional pickup buyers who’re used to pickups and bigger trucks being built on a frame with the body. Then the manufacturer can put anything on top to make it an ambulance, delivery truck, dump truck, RV, and so on. Ford’s best-selling F-150, sold just as a pickup, can be had in three cab configurations, three bed lengths, and three degrees of ruggedness and load-hauling (F-150, F-250, F-350). Chandler, who is long (bets TSLA goes up), says:
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 (NYSE:UPS) and FedEx (NYSE: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.
Mustang Mach-E Is Simpler to Love
The Mustang Mach-E is a simple story: Ford is an international automaker and needs to build for a world market, as well as try to stoke life into US EV sales. It took what might have been the next Ford Escape in EV form and decided to a) call it a Mustang and b) give it performance attributes an Escape EV wouldn’t have received.
Mustang fanboys don’t like it one bit. But Corvette traditionalists are crying in their beer about the Vette being mid-engined, as if that’s a bad thing.
If you think of the Mach-E as one more compact/midsize crossover for Americans shopping, or taking kids to soccer practice or ballet class, it’s fine. The 15-inch screen is a nice taste of the future.
That Ford chose to have the rollout at Hawthorne Airport near LAX, the same place Tesla did it’s rollout five days later (and where its design studios are sited), well, what’s wrong with a little competitive psychology?
Why the EV Market Hasn’t Taken Off
Several factors keep EVs from being 5 percent or 20 percent of US sales. Some of the issues are perceptual.
- They cost more. Even if service is less complicated.
- The tax credit is going away for Tesla with GM to follow. And even $7,500 doesn’t always recapture the price delta versus a comparable gas-engine car.
- Range anxiety is real. At least in buyers’ minds, and certainly if it’s the family’s only vehicle.
- The public charging infrastructure isn’t there (except Tesla).
- Urbanites and suburban apartment-dwellers don’t have ready access to charging at home.
- The EV cost-of-energy advantage disappears at public charging stations.
- Inductive chargers and robotic charging arms aren’t ready.
- People too unmotivated to plug in don’t use PHEVs as EVs, negating their value as EVs and making it less likely they’ll buy another.
- Some California towns charge more for electricity the more you use, raising the cost of home charging to the equivalent of burning gasoline.
- Cold weather does a number on EV range.
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