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Musk Shows His Mastery Yet Again As Orders Pick Up Despite Launch Fail

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Musk Shows His Mastery Yet Again As Orders Pick Up Despite Launch Fail

So, Tesla Inc (NASDAQ: TSLA) unveiled its Cybertruck at Tesla Design Studio in Hawthorne, Calif. And while Musk went on to demonstrate the strength of the glass, the window glass cracked. When the company's design chief hurled a second metal ball at another window- this time it got shattered. Could that get any more embarrassing? But did it stop Musk? Definitely not as despite its decut gaffe, Tesla received 200,000 orders of this big metallic trapezoid which has a starting price of $39,900.

Reservation

To reserve a Tesla Cybertruck, people must make a $100 pre-order fee or refundable deposit, far less than the $1,000 to reserve a Model 3 several years ago and the $2,500 deposit for the Model Y. Cybertruck production won't start until at least late 2021 or maybe even later for them to figure out the glass problem, but one thing is for sure: it's definitely less costly to pre-order a Cybertruck than it has been to order previous Tesla's vehicles.

Tesla uses these pre-orders to generate excitement with its potential customers but also to provide a short-term revenue infusion. And this is surely helpful when it comes to providing a cushion for the cash-strapped automaker that is still finding its way to stable profitability.

But, let's keep in mind that Tesla never disclosed a precise number or even percent of reservations that ultimately converted to sales. And it still didn't reveal how many customers paid a deposit for its electric crossover that was unveiled in March! In other words, Musk chooses what to tell you.

Competitors

This special truck was seen as a competitor to the leading Ford Motor Company's (NYSE: F) F Series. Ford just unveiled its all-electric sports vehicle at the Los Angeles Auto Show, messing with the iconic Mustang's name but showing the company's risky electric switch in focus. And there's the General Motors' (NYSE: GM) Silverado as a follow-up. As a reminder, Ford is on the "following" side when it comes to California's stricter emissions, along with Volkswagen (OTC: VWAGY), Honda Motor Company (NYSE: HMC) and BMW (OTC: BMWYY). On the other hand, GM, Toyota Motor Co (NYSE: TM) and Fiat Chrysler (NYSE: FCAU), among others, sided with President Trump in an effort to delay the inevitable as much as possible.

But after its debut, many concluded the Cybertruck is more of a niche product due to a quite ‘edgy-design', so Tesla remains as the ‘inventor' of the game, adding some more headache to its rivals who are already struggling with the costly technologies needed for EVs and a maturing traditional car industry.

Outlook

Musk said Tesla will achieve profitability again. And the company posted a surprise profit in the most recent third quarter. Musk managed to get a massive number Cybertruck pre-orders despite a failed debut with simple humour saying "for some weird reason, it broke now" and "we'll fix it later". That is a nice track record, as far as this year is concerned.

But Tesla still has many sceptics out there as its shares fell 6.1% in Friday trading and closed at $333.04. And the question is: how long will this profitability last? The launch definitely wasn't a good start but Tesla is more than acquainted with ups and downs, not to say iconic rollercoasters. We need to wait and see if Musk can lead Tesla into long-term profitability, for the electric pioneer to sustain this performance through a range of hard tests that are ahead. But if one thing is certain from those Cybertruck orders is that Tesla's marketing game is as strong as ever!

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Image by Blomst from Pixabay

Posted-In: Elon Musk IAM NewswireNews Specialty ETFs Markets Tech ETFs General

 

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