The legendary PT Barnum once did a promotion at his circus that said: This Way To The Great Egress. And sheepish people went right out that door to see the Great Egress. Of course, egress is another word exit, thus having the people leave, and had to pay an entry fee to get back in.
Clever? Certainly. Ethical? Not really.
I pose this story as I believe Elon Musk has PT Barnum-like qualities. He’s slick, charismatic and all-around interesting. Musk has disrupted the auto industry for years, and that’s a very good thing. The Big Three in Detroit plus the European and Asian auto manufacturers had gotten too comfortable, and Musk and Tesla unleashed a storm on the industry. That’s unquestionable.
Musk’s methods, however, are unconventional. The biggest case in point was the Tesla Cybertruck. He introduced this space-age, Mad Max-looking steel-and-bulletproof truck in 2019 to PT Barnum-like fanfare. Talk about the Greatest Showman!
The Cybertruck immediately sent shockwaves in the auto industry. Allegedly, within the first week 250,000 people put down a $100 refundable deposit for the all-electric pickup truck. Now, if numbers and crowd sourcing information is correct there is anywhere from 750,000 to 1 million pre-orders for the Cybertruck. Let’s take the high number and assume it’s 1 million at $100 per reservation.
Those Tesla fans literally lent Musk $100 million in a tax-free loan on the promise of a truck that may or may not happen and may or may not clear safety protocols. With so much uncertainty, is this Elon Musk’s Great Egress?
A report at TorqueNews.com has an alarming headline that reads: Vaporware Tesla Cybertruck Deliveries Delayed Until 2023. Ouch! But “vaporware” is fairly accurate at this point, as the Cybertruck has faced several delays, and many question whether it will ever make it to production.
Musk himself admitted on Twitter and CNBC that there was a chance the Cybertruck would be a flop. And now we know that both Rivian and Ford will be out with their all-electric pickup trucks far ahead of the Cybertruck — even though Tesla revealed the Cybertruck a full year before either the Rivian R1T or the F-150 Lightning.
During the 2019 reveal, Musk said the Cybertruck would be on the road by 2021. And people plopped down their Ben Franklin to be the first ones to get the first all-electric truck. Those people are still waiting — and will continue to wait for 2 more years if reports are true.
On a conference call to discuss the latest delay of the Cybertruck Musk brushed some things aside as far as the production delays. He made a reference to the movie “The Matrix” and said the Cybertruck will most definitely happen, adding the production issues were “like a glitch in the Matrix. Like if Neo had a car.”
There were a lot of imaginary things in that movie, and what was reality and what wasn’t is the basis of the movie. So that reference by Musk seems apropos.
Where does Cybertruck fit in reality? There’s clearly a market interest for it. It’s incredibly hard to imagine such a goofy-looking vehicle being on the road, but maybe that’s the appeal of the Cybertruck? It goes against the grain and thumbs its nose at conventional pickup truck wisdom.
The F-150 Lightning looks the part of an F-Series, and the Rivian R1T has some non-conventional looks but still looks like a pickup truck. Even GM’s all-electric Hummer holds true to the old Hummer SUT looks.
So, where in the truck consumer matrix does the Cybertruck fit? That’s the 100 million dollar question.
The Sherman Antitrust Act was established in 1890. Section 2 of the Sherman Antitrust Act of 1890 act states that “announcing a product that does not exist to gain a competitive advantage is illegal.”
Examining this, Musk announced the Cybertruck to much fanfare and excitement. And got people to hand over their $100 for the right to place an order. On the surface this does not seem illegal. And because those $100 deposits are refundable, he didn’t actually take money from them. But he did seem to scam them into giving him an advance, interest-free loan, as the Tesla stock prices soared.
It’s far-fetched to think Elon is in violation of any real federal law, and certainly hard to prove, as it relates to the Cybertruck. But just how long will the Tesla fans remain loyal and patient?
With delay after delay, the Teslarati and Tesla fan bois have defended Elon and the Cybertruck. Bombastic attacks on the F-150 Lighting on Twitter and Facebook have developed a weird rivalry between Ford and Tesla. In the end, it’s Ford that’s laughing last as pre-production F-150 Lightnings are rolling off the assembly line right now. And the final product will be available for purchase in the spring.
Ford also has more than 100,000 reservations for the F-150 Lightning and will be able to fulfill those orders. Meanwhile the Tesla Cybertruck reservation holders continue to wait. Was this a scam job by Elon? Not likely. What I believe is Musk has always underestimated just how difficult (and costly) manufacturing automobiles is.
He’s a great showman. And he’s got his hands in other exciting ventures, such as Space X, so he’s not solely focused on automotive manufacturing. This is likely part of the reason for the delay. Automakers such Ford and General Motors have perfected the manufacturing process. But Tesla? It’s still very early in the process with many more hurdles to overcome.