Tesla, Inc.'s TSLA Cybertruck continues to make a buzz as its launch date closes in.
What Happened: The Cybertruck could soon become a $30 billion business, said Bloomberg news anchor and tech news chronicler Jon Erlichman in a tweet on Saturday.
Still, the market for full-sized pickups has been dominated by Ford Motor Co. N, General Motors Corp. GM and Ram, the three of which control more than 90% of sales, Erlichman added.
The journalist noted that Tesla CEO Elon Musk first unveiled the Cybertruck in 2019, whose unique design piqued the public’s curiosity and led to a pile-up of preorders. The uniqueness of the vehicle’s design will likely impact production ramp-up, Erlichman added.
Erlichman further noted that, in May, Musk hinted at Cybertruck sales volume of 500,000 per year once production ramps up. This would match the sales of the Chevy Silverado, the anchor said. He added that the average price of a full-size pickup truck is more than $60,000, and, therefore, half a million sales would generate $30 billion in sales for Tesla.
Erlichman also highlighted some potential challenges, including the margin impact of having an electrified pickup truck. “[Traditional] trucks make big profits. Making EV's affordable hurts profit,” he said.
He also wondered aloud about the possibility of the Cybertruck’s radical new design not finding traction among traditional pickup truck buyers, which would required Tesla to go back to the drawing board.
Why It's Important: Cybertruck reservations swelled to 1,943,876 as of Friday, according to an online crowd-sourced data tracker, suggesting a high-interest level for the vehicle.
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Musk said last week on the company's earnings call that the demand so far is “off the hook that you can’t even see the hook.”
Future Fund's Gary Black added that, just as Tesla’s volume growth jumped from 36% in 2020 to 87% in 2021 when Model Y deliveries began, Cybertruck should boost volume growth in 2024.
Tesla ended Friday's session at $260.02, down 1.10%, according to Benzinga Pro data.
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