When Tesla unveiled the design of their Cybertruck last week, a lot of people thought it was a joke. The truck looked so minimal, composed of a small number of flat planes, that many immediately assumed the design was thoughtless and child-like in its simplicity.
Barrons summarized this sentiment nicely:
Elon Musk tweet[ed] out “250K” on Tuesday night. That’s a big number, certain to go higher, though Wall Street is skeptical. The reasons: The design resembles a children’s toy.
Barrons
That was everyone’s first reaction: Is that design a joke? But one week after we first saw Tesla’s truck, the design is starting to look kind of genius. Here’s why:
1. Branding Genius: The Cybertruck Flip
The Cybertruck flip: It’s a strange moment that thousands of people are starting to experience. One moment, a legacy auto truck looks good, normal, tough –– exactly what you expect a truck should look like. The Cybertruck looks bizarre and perplexing.
Then suddenly, after you’ve looked at the Cybertruck long enough something happens. Suddenly… it starts to look… kind of cool?
That shocking, brutal, angular design creates a breathtaking panoramic all-glass cabin experience –– perfect for enjoying the view in an autonomous truck. The longer you look at the Cybertruck, the more you start to see yourself using one. Suddenly, all the old gas-powered trucks start to look outdated, and the Cybertruck starts to look like the future. This is a stroke of branding genius.
When entering a new product category, taking this kind of approach is extremely risky. If you pull off a new design, you can make your competitors look outdated. But if you fail to deliver a better product, you just look weird and fade into obscurity. Somehow, Cybertruck managed to pull it off. Just by the silhouette, you can tell that this is a very different truck.
It looked ridiculous at first glance, but it’s starting to look like a really unique and differentiated design that will excite a lot of people. It won’t be for everyone, but some people will love it. That’s why the Cybertruck design is branding genius –– the design will give Tesla a competitive advantage over generic trucks.
During the unveiling, Tesla made a point of showing the three most popular trucks on the market without branding. Without the manufacturer logos in front of the car, it’s hard for most people to tell which truck is which.
Now take a look at Cybertruck. There is no branding –– no Tesla logo to be seen. But unlike the three trucks pictured above, nobody is going to have any trouble figuring out that’s a Tesla Cybertruck. They know. It’s a car that turns heads, and one that everyone already has in mind.
I think that’s very powerful. Different is a risk, but only when it’s different for the sake of being different. When you’re different for the sake of being better, you can end up with a distinctive design that makes your competitors look outdated, and your product look like the future. Mark my words, we will see copycats of the Cybertruck design trying to capitalize on the amazing branding work Tesla has laid the foundation for here before very long.
2. Aerodynamic Genius: Range That Can’t Be Matched
Trucks are some of the least aerodynamic and least fuel-efficient vehicles you can find. The Cybertruck doesn’t look different than other trucks just because Franz is a huge troll. From the very start, the design of this electric truck was meant to maximize range and minimize drag.
One of the biggest problems for a truck in terms of drag is the open bed. Having a motorized tonneau cover that can be opened and closed easily fixes this, and works better in an autonomous world. The entire shape of the vehicle is meant to maximize range –– not just to look weird.
Just look at the numbers: The closest electric truck competitor, the Rivian R1T can go 400 miles for $69,000. The $69,000 Cybertruck goes 500+ miles. How are they getting at least 25% more range? You can bet the truck’s unusual design makes up at least some part of that gap.
If I were legacy auto, I would be careful making fun of the way the Cybertruck looks. It may well be that there is no way to match the Cybertruck’s specs with a traditional truck design. There are a lot of ways to make a more aerodynamic truck, but most of them look pretty ugly.
When you don’t like the game, flip the table
The problem here has to do with the laws of physics: Having a large bulky front and open bed creates drag. Too much drag makes you less fuel-efficient, reduces range, and limits your top speed. When you’re designing a car with a gas engine that doesn’t matter –– just add a bigger fuel tank or a better engine; it won’t be a problem. But when you’re designing a vehicle with an expensive heavy battery, you need all the fuel efficiency you can get to hit your price targets.
There was no way for Tesla to design an electric truck to look as big and bad as a gas truck without sacrificing on range or price. The bigger you make it, the worse the range is. You just end up looking like a small underpowered truck. But by completely taking a different direction, Tesla avoided that comparison altogether.
This allowed for a new design that’s much more aerodynamic than any truck on the market without looking like a small under-powered truck. An electric vehicle couldn’t win trying to pretend to be a gas truck. But with a design that’s more authentic to itself, it has a chance to be the best and define a category. That’s why the Cybertruck’s design is aerodynamic genius.
3. Production Genius: Let People Buy It
Will Cybertruck be one of the most popular electric trucks in the future?
A big part of that depends on when people are able to buy it. If other electric trucks from established brands hit the market first, they could take a large share of the market quickly. But if Tesla can deliver a better product sooner, they may have a shot. Whether the design can be produced easily is critical, given that Tesla doesn’t have a lot of cash to spare and is trying to maintain profitability while ramping up production of this vehicle.
It looks like the Cybertruck’s design should have some benefits that make it much easier to produce. Because of the unpainted stainless-steel finish, Tesla doesn’t need any paint shop capacity for the Cybertruck. This is typically one of the most expensive bottlenecks in any vehicle production process. Motor Trend estimates Tesla will save at least $200 million skipping the paint shop for Cybertruck.
On top of that, they won’t need that giant stamping press either. Because the stainless steel alloy being used can’t be stamped, they’ll have to bend it at high temperature using much simpler, much cheaper machines.
Since Tesla has less CapEx spending to do to set up all the “machines needed to make the machine”, they should be able to set up production faster. On top of that, it should be much easier to maintain profitability while they spool up production and to ramp production more quickly.
Every time they make a truck, there will be a few fewer steps. Production time and costs will be lower, increasing the truck’s chances of success in the market. Now that’s what I call production genius.
4. Pricing Genius: An EV Truck That’s Priced to Kill
The materials and design aren’t just easier to set up for production: they’re also cheaper to make. With the vehicle’s “exoskeleton” design, the body of the vehicle actually makes up its structural frame, rather than being useless baggage. Not needing paint also saves a lot of money and time during production.
Again, we have a requirement that’s more important than looking like a polluting truck: Being priced to kill. And Cybertruck’s design does exactly that.
Going into the event, people were expecting pricing starting at around $50,000. At that price point, Cybertruck would attract interest but would be perceived as decidedly more expensive than a simple old-fashioned polluting gas truck. Starting at $39,900, the Cybertruck is set to achieve sticker price parity with other similarly spec’d trucks.
Start factoring in the fuel and maintenance savings like many commercial customers are beginning to do, and you better have a pretty good reason not to go electric right away.
Sure, Tesla could have gone for a traditional design with a starting price of $49,000. They could have taken a nice bite out of the most profitable segment of the market. But that wasn’t good enough: They wanted a design that could slaughter the rest of the pick-up truck market. And that’s why the design of the cybertruck is an act of pricing genius. It’s better to have a design that’s accessible to more people that want one than to cling on to some outdated idea of what trucks are “supposed” to look like.
Since electric trucks need a big expensive battery, Tesla had to make some dramatic changes to compete on price with traditional gas-powered pickup trucks. Making those changes to be price competitive is well worth it, even if the solution to this problem looks strange at first. Fashion is funny and more malleable than people think anyway.
5. Strategic Genius: A sigh of relief
Before the Cybertruck unveil, Ford and GM had already crapped their pants worrying about Tesla’s entry into the truck market. Would they be ready to face their first new competition in 50 years? Ford aggressively singled out Tesla in their Mach-E reveal, which they held across the street from Tesla in Hawthorne, California.
While it’s fun to watch competitors squirm, it’s a little bit easier to have them off your back and caught off guard. The competition’s reaction to the Cybertruck is exactly what Tesla should be hoping for:
Wall Street analysts say Tesla’s pickup is ‘really weird’ and Ford can ‘breathe a sigh of relief’
CNBC
That was the headline based on a report by Credit Suisse. I’m sure much of the competition was relieved to laugh at the new truck design they’d been worrying so much about. But ultimately I don’t think the appearance will turn as many people off as they think. It will grow on at least some people.
Legacy auto should be worried, but Tesla managed to generate a lot of excitement while still playing it cool. Presenting a Cybertruck design that’s completely out there is a strategically brilliant move at a moment when the competition is watching Tesla closely.
Legacy auto didn’t know what to expect before the reveal. But it sure as hell wasn’t that. And that’s exactly how Tesla seeks to maintain the upper hand in the battle for the future of the truck.
6. Genius Positioning: It’s Not a Cannibal
One of the big problems with unveiling a Cybertruck at the same price point as the Model 3 and Model Y is that people might decide to wait for Cybertruck instead of buying a Model 3 or Model Y today. If people stop buying Tesla’s cars today hoping for a better one tomorrow, the company would go out of business. Thus, an important goal of the design is being differentiated enough that it creates separate demand than those looking at Model 3 or Model Y.
If it looked something like Truckla, cannibalization might have been a much bigger issue. But with a crazy, futuristic, polarizing design many people will continue to choose Model 3 and Model Y today. The vehicle designs are different enough that you might want one or the other for different purposes or use cases. Maybe you want both.
The genius of having a design that’s out there and takes time to “grow on you” is that people will continue buying your present-day cars while your future cars slowly start to grow on them. Well played, Tesla.
A First Principles Truck Design
Form follows function with the Cybertruck. Every aspect of the design is considered holistically to knock this product out of the park. Many people won’t like the design at first, and some never will. But many others will start to like what the design does for them, and how it all adds up to a product that’s better than a gas truck.
That’s the bottom line. We need sustainable transport now. We need every vehicle of every type to be electric. Do we have the technology to build an electric truck that’s better than a polluting truck today? Honestly, it’s a stretch. It’s never been done before, that’s for sure. The Cybertruck design is a blank sheet of paper truck design with the sole purpose of pulling that sustainable future forward as far as possible.
You can order one for just $100.
Great article!!! Very well thought out – all 6 points
Speaking purely of Cybertruck’s aesthetics, this is a work of art that Marcello Gandini would have drawn.
This is a vehicle that kids are begging their parents to purchase — wow — automobiles are cool again!
Hi ghost,
An enjoyable read as always.
I do feel you’ve fallen into the “3mm SS is obviously easier to produce” trap here.
Clearly Tesla feel they have a shot at making it work in production but it’s far from obvious that this is going to be easier / cheaper to produce. Think about it, if it was obvious then everybody would be doing it.
Yes it’s great if you can delete the paint shop. BUT it’s not a straightforward delete. The SS still needs finishing. Bending to correct geometry will leave surfaces with the grain in the “wrong” direction. Bending machines will leave little scars. Welds will look ugly. The whole body will need refinishing once it’s in the completed shape. Trad methods for this refinishing are notoriously variable and a bit tricky to get right. There’s work to be done here and it’s really not obvious a cost saving will be the result. And we haven’t even started taking about the cost of 3mm cold rolled stainless.
Then there’s the pressings. Again it’s attractive to think about the capex saving on presses and tools, but again it’s not a simple delete. Pressings are used almost universally because they are very cost effective in volume – just think about the rate at which these machines pump out the parts. Laser cutting and bending machines are much slower, and not free.
Then in addition to all that process innovation that will be needed, there will be many many “little” design challenges that need solving along the way. E.g. how do you make this hardened steel exoskeleton function as a crash structure? When it does, how do you plan for economic, but safe, repair of that structure?
In sure Tesla has some answers for all this, but I want to be clear that this is all a very long way from obviously easier / better.
As a result, whilst I predict fast and efficient ramps for GF3 and Model Y based on existing learning, I also predict a return to production hell, perhaps to one of the deeper circles, for cybertruck.
The good news is that if they can solve all those challenges that will represent another moat.
Cheers,
Matt
They won’t be bending it “at high temperatures”: pretty sure heating means losing the properties of cold-rolled steel…
Most of this reflects my own thoughts — but as always, you said it much better than I ever could 🙂
However, I have to disagree on branding. If they could make a conventional-looking truck with roughly the same specs and price, making it different just for branding would be a *bad* idea.
A controversial design is a good idea if you are introducing a product that wouldn’t have much of a unique selling proposition otherwise. Only some people will like it, but that’s fine in this case, since at least those will buy it on looks alone — while others likely wouldn’t have bought it anyway.
That’s different if you have a novel or clearly superior product: in that case, you want it to be uncontroversial, so you don’t alienate anyone from the already broad pool of potential customers, just to please a minority that will want to buy it more because of the distinctive looks…
That’s why I think the weird headlights on the otherwise conventional-looking Rivian truck are a bad idea: they are alienating a bunch of potential customers, instead of fully monetising on their first-mover advantage.
Also consider the existing Tesla vehicles: the Model S and Model 3 look pretty much like other sedans, since sedans are already efficient in general, so there is no need to make them different: it would only alienate potential customers. The Model X on the other hand looks quite different from traditional SUVs, because it needs to in order to be good. It’s controversial, and that’s surely one reason why it is relatively less successful in its segment than S and 3 are in theirs — but it’s a necessary compromise in this case.
Same with the Cybertruck.