Starting at $60,990, Tesla’s Cybertruck is priced 50% higher than initial estimate

© Reuters. FILE PHOTO: Tesla’s new Cybertruck is shown on display at a Tesla store in San Diego, California, U.S., November 20, 2023. REUTERS/Mike Blake/File Photo

By Akash Sriram and Hyunjoo Jin

(Reuters) -Tesla on Thursday published prices for its long-delayed Cybertruck electric pickup, starting at $60,990 for the lowest cost variant, over 50% more than what CEO Elon Musk had touted in 2019.

Musk drove a Cybertruck onto a stage to cheers from the crowd and later handed keys to about a dozen customers at an event in Austin, Texas.

The Cybertruck has a 6 foot long 4 foot wide truck bed, 2,500 pounds in payload capacity, 11,000 pounds towing capacity, and a 17-inch ground clearance, he said.

Tesla (NASDAQ:TSLA) showed a video of the Cybertruck towing a Porsche 911 and beating another gasoline-powered 911 in a short race.

The event comes weeks after Musk tempered investor expectations citing problems in ramping production of what he called a “radical” product.

Cybertruck, Tesla’s first new model in nearly four years, is critical to its reputation as a maker of innovative vehicles. At a time when the company is battling softening electric vehicle (EV) demand and rising competition, Cybertruck is also key for generating sales, though not to the extent of the company’s high-volume Models 3 and Y.

“We dug our own grave with Cybertruck,” Musk said last month, warning that it would take a year to 18 months to make the vehicle a significant cash flow contributor.

He said in 2019 the truck would be priced at $40,000.

On Thursday, Tesla’s website showed the ‘cyberbeast’ – the highest performance variant – and all-wheel drive versions would be sold for estimated starting prices of about $100,000 and $80,000. These would be available next year.

The rear-wheel drive version with an estimated starting price of about $61,000 would be available in 2025.

Ahead of the launch, Musk captured media attention on a different subject, giving a profanity-laced interview to the New York Times on Wednesday. He cursed advertisers who had left his social media platform X, formerly known as Twitter, because of antisemitic comment. He also said that customers who didn’t like him should judge his products by their quality, including Tesla EVs.

The billionaire has said Tesla was likely to reach a production rate of roughly 250,000 Cybertrucks a year in 2025. Tesla has faced “enormous challenges in reaching volume production” with the Cybertruck because of its new technology and design, Musk said.

Cybertruck’s new body material and unconventional, futuristic styling add complexity and costs to production, and threatens to alienate traditional pickup truck buyers who focus on utility, experts say.

The truck is made of shiny stainless steel, shaped into flat planes with few if any curves. Musk has said it is partly inspired by a car-turned-submarine in the 1977 James Bond movie “The Spy Who Loved Me.”.

During its 2019 reveal, Tesla’s chief designer Franz von Holzhausen took a metal ball to demonstrate the truck’s unbreakable “armor glass” window, only to shatter it.

Holzhausen on Thursday lobbed at the Cybertruck window a baseball, that bounced off.

A few years ago, Musk had floated the idea that if people did not like the futuristic Cybertruck design, Tesla could “build a normal looking truck.” On recent calls and interviews he has emphasized the model’s innovation.

“The larger problem for the Cybertruck is the Cybertruck wasn’t really designed for pickup truck users,” Eric Noble, president of automotive consulting firm, The CARLAB, said.

“It will have a much narrower appeal than a Ram or an F series,” he said of the popular Ford (NYSE:F) F-150 pickup.

Cybertruck, which is two years behind schedule, enters a hot and highly profitable pickup truck market to compete with the likes of Ford’s F150 Lightning, Rivian (NASDAQ:RIVN) Automotive’s R1T and General Motors (NYSE:GM)’ Hummer EV.

Rivian’s R1T has a starting price of $73,000, while Ford’s F-150 Lightning starts at about $50,000, meanwhile the larger and more powerful GMC Hummer EV pickup costs more than $96,000.

Seth Goldstein, equity strategist at Morningstar, had said he expected the Cybertruck to be priced between $50,000 to the low-$70,000 range.

Cybertruck has drawn more than a million reservation holders who have put down $100 as deposits. New deposits are $250.

“Tesla’s products have largely appealed to more affluent early adopter types. And this is going to be no different,” said Paul Waatti, an analyst at consultancy AutoPacific.

“It’s going to have a smaller audience than the SUVs will have, but I think it’s gonna do surprisingly well.”