Weekly Brief: Tesla’s Sound of Breaking Glass Echoed By Share Price Crash

Well that didn’t go how Elon Musk expected.

Halfway through his presentation last Thursday of Tesla’s new electric pickup truck, the Cybertruck, Musk invited the truck’s lead designer, Franz von Holzhausen, on stage to prove how impervious the truck was to any outside threat, be it a bat, a ball, a bullet, a lead pipe … you know, the typical stuff you’re worried about on any given day in America.

Many onlookers were already taken aback by the design of the truck, which calls to mind an armored truck built for a dystopian future like Mad Max: Fury Road. Its lines are cold and angular and reminiscent of a rubber door stop. Its color is gunmetal gray. Its effect on viewers was one of befuddlement, intrigue and confusion even before von Holzhausen grabbed a sledgehammer and whacked the driver side door.

Yet when instructed by Musk to throw a metal ball against the car’s window, von Holzhausen saw the window shatter to groans in the audience and panic on Wall Street. Within hours Tesla’s stock had plunged more than 6% and Musk was the laughing stock of Twitter.

Part of it was that Musk had hyped the truck very hard in the build up to the event, as he is wont to do. “The Cybertruck will be a better truck than an F-150 in terms of truck-like functionality and be a better sports car than a standard Porsche 911,” he boasted. When exaggeration becomes your MO, the world is primed to laugh at your expense the moment things go wrong.

This was about more than just comeuppance. It was about genuine disappointment. The market for pickup trucks is one of the most lucrative vehicle segments in America. Investors had hoped that Tesla would be able to bolster its sales and carve out an important niche for itself, even if it didn’t surpass the Ford F-150 or the Dodge Ram in sales volume. A busted presentation is one thing. A weird design that won’t find traction is another.

That last point remains to be seen of course. Surely Tesla enthusiasts will join the queue when the truck hits the market in 2021 with Tesla claiming 150,000 have already placed their orders. Yet, the truck departs from Tesla’s previous design aesthetic so dramatically that it’s tough to predict how even the most ardent of Tesla fans will react when it comes to stumping up the cash. Its allure as the first all-electric pickup truck on the market may attract additional buyers. Its low price point may as well. The Cybertruck starts at $39,900 whereas its competition is mostly above $60,000. The question is whether the design is too off-putting for these cost-conscious buyers.

There is a third scenario. Perhaps contrary to initial perception, the design actually grows on people and becomes the truck’s strongest asset. Some engineers have pointed out that the design is actually quite innovative given how it cuts out all extraneous features and, thus, makes it a much more affordable truck to manufacture. Are we standing on the doorstep of the future here or in the wreckage of an epic dustup that Elon Musk will long regret? Jury’s out.

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