Tesla Cybertruck more 'cult car' than Ford F-150 killer, bullish analyst says

Tesla's Cybertruck will have limited appeal and most likely be a "enthusiast/cult car" rather than serious competition to the Ford F-150 and other legacy pickups, concludes a Morgan Stanley analyst who is generally bullish on Tesla.

"We regularly speak with clients who believe Tesla may sell hundreds of thousands of Cybertrucks annually," said analyst Adam Jonas after visiting Tesla's Texas factory, where the pickup will go into production later this year.

"We think it will more likely be an enthusiast/cult car with far more limited volume" closer to 50,000 units/year, Jonas wrote in a research note Thursday. There should be "some design and manufacturing learnings" from the Cybertruck that could make it into core Tesla vehicles, he added.

The assessment comes after Jonas attended Tesla's March 1 Investor Day at the Austin plant, where the Cybertruck was on display. Jonas rates Tesla stock as a "buy" with a price target of $220 per share compared with Thursday's closing price of $172.92.

While the Cybertruck was a source of excitement when it was first unveiled by Musk in 2019, Tesla has larger ambitions now.

"The truck is real and we had a great time with it behind the Austin plant," Jonas said. "But financially it may be more of a sideshow to the Tesla story today."

Since the Cybertruck's unveiling, EV maker Rivian launched its R1T pickup in late 2021 and Ford began selling its electric F-150 Lightning last year. Chevrolet is scheduled to launch its Silverado EV later this year and Ram plans to join the segment in 2024.

Other auto industry analysts also see Tesla's wildly designed pickup as a niche product. And Musk has failed to clarify its starting price, which originally was promised at $40,000. Musk has since said the price will be higher, but not by how much.

"We feel the Cybertruck carries more value in a cultural/zeitgeist sense than in a direct economic sense," Jonas said. "We encourage our readers to ask themselves: How many Cybertrucks can roll up to a parent-teacher conference or youth soccer match at the same time before losing some of that indescribable something?"

With an unpainted stainless steel exterior and sharply sloped roof, the Cybertruck doesn't pose a significant threat to the established pickup market, Jonas said. It could, however, eat into the enthusiast truck market where vehicles like the Ford F-150 Raptor compete, he said. The Raptor has a starting price of $78,670 with shipping.

The Cybertruck might make more sense as a limited-edition vehicle rather than a mass-market offering, taking a page out of Ferrari's playbook, Jonas suggested.

Tesla fans put crowdsourced estimates of Cybertruck reservations at over a million, which would guarantee several years of brisk sales if converted to formal orders. Reservations can be made with a refundable $100 deposit, meaning they can be withdrawn easily.

Although the Cybertruck has changed since the 2019 prototype was unveiled, Tesla has not backtracked on its performance promises.

Tesla said the Cybertruck's advantages over most legacy half-ton pickups include six-passenger seating and a 6.5-foot bed with 100 cubic feet of lockable storage. The automaker has touted a battery range starting at 250 miles and surpassing 500 miles on some versions.

Price will also be a major factor since Tesla says its costs have risen in recent years, due in part to supply-chain constraints and inflation.

"Our primary challenge is affordability," Musk wrote on Twitter last year in response to a question about Cybertruck pricing. "Creating an expensive truck is relatively easy."