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By Tim Higgins and Heather Somerville
Elon Musk embraced unorthodox design choices with Tesla Inc.'s all-electric pickup to wow truck buyers and help differentiate it from popular models offered by rivals he knocked as boring look-alikes.
But the features he is promising could dent the commercial prospects of the vehicle Mr. Musk has dubbed Cybertruck.
Mr. Musk launched the triangular, steel-body truck late Thursday. The unveiling focused principally on demonstrating how robust the vehicle would be and how it would stand out from well-known models such as Ford Motor Co.'s F-150 or General Motors Co.'s Chevrolet Silverado and the GMC Sierra pickup family. The Tesla pickup is even bulletproof, Mr. Musk said.
But when it came to demonstrating that toughness, things went somewhat ominously off script. Mr. Musk asked his head of design to throw a small metal ball at the side window. The resulting crack of the window surprised the audience.
"Oh my f-ing god," Mr. Musk said. "Maybe that was a little too hard."
The truck's unique appearance also sparked debate. The pickup looked like the love child of a DeLorean, the unconventional sports car featured in the Back to the Future movies, and a Pontiac Aztek, which was widely panned as ugly in the early 2000s and became an embarrassment for GM. Early Friday, DeLorean was even trending on Twitter and some users were digging out past photos of the Aztek.
Mr. Musk has defied conventional automotive industry wisdom during the past 16 years by demonstrating that hundreds of thousands of people are willing to pay a premium for electric cars. Part of that was through sleek design, such as with the Model S, which inspired people to buy a cool car that just happened to be electric, too. The pickup aims to follow in the tradition.
As Tesla prepared the pickup, some inside the company worried Mr. Musk's personal taste was overly influencing the design and questioned if his preferences would be in line with buyers.
In some ways, the extreme, aggressive looks coupled with the emphasis on ruggedness are in line with trends in the segment. Fiat Chrysler Automobiles NV's Ram, for example, has pushed the envelope in recent years with its brutish look and been rewarded with increased sales, threatening GM's Silverado business.
But several analysts said Tesla went too far. The Cybertruck, they said, could be relegated to be a niche product that lacks appeal for the commercial buyers who make up a big part of the buying pool. Dan Levy, an analyst with Credit Suisse, was blunt: "Ford and GM can now breathe easy again."
Shares in Tesla were down about 6% in midday trading on Friday.
Many on social media, especially in the videogame world, seemed to love the looks, while others made fun of it.
Tesla has to cut a new path in trying to attract truck buyers, who are loyal to their current brands. Toyota Motor Corp. and others have tried to take market share from the Detroit auto makers for years, with little luck. One area where Toyota has found success is in midsize trucks, especially in California, where lifestyle buyers are willing to pay for trucks to run errands and pursue weekend hobbies.
California is Tesla's best market in the U.S. Analysts said the Tesla truck could appeal to early adopters and those looking to attract attention. In the 2000s, GM's Hummer brand of large, military-inspired SUVs attracted a following among buyers looking for a flashy ride, until high-gas prices and concerns about the environment lead to dwindling sales and its termination. GM is reportedly considering bringing back the SUV as an electric vehicle.
"With its unabashed looks, we believe the truck will initially appeal to the influencer crowd (celebrities and pop culture) and the `look at me' crowd," said Joseph Spak, an analyst with RBC Capital Markets. "Call the Cybertruck a Hummer for the green millennial generation, really the ultimate virtue and vice signaling machine."
Tesla investor Ross Gerber, chief executive of Gerber Kawasaki Wealth & Investment, took to Twitter on Friday to praise the new truck. "It's possible that Tesla just expanded the market for trucks," he wrote.
Toni Sacconaghi, an analyst for Sanford C. Bernstein & Co., estimated annual sales might reach 50,000 trucks a year, saying its performance could be similar to Hummer, which sold between 30,000 and 80,000 vehicles a year during its lifetime.
"Tesla's Cybertruck looks weird...like, really weird," he said in a note to investors. "Which is too bad, because its on-paper specs are insane and the price is very competitive & much better than expected."
Tesla has struggled to ramp up production of every vehicle it has brought to market since its founding, including the most recent Model 3 compact sedan, which is part of Mr. Musk's plan to turn the auto maker into a mainstream electric-car company. He has also struggled to offer the vehicles at the starting price that he initially touts.
The Model 3 didn't initially arrive in stores with the long-promised $35,000 starting price and it took months and months of effort and extreme cost cutting to get down to close that price. Most sell for much more, which makes investors happy.
David Kudla, founder and chief executive of Mainstay Capital Management and a short seller of Tesla stock, questioned Tesla's ability to make a profit on a vehicle with a bulletproof steel body, armored glass and such a low starting price.
"That's just reminiscent of a $35,000 Model 3 that they really haven't gotten to in a very realistic way," Mr. Kudla said.
Write to Tim Higgins at Tim.Higgins@WSJ.com and Heather Somerville at Heather.Somerville@wsj.com
(END) Dow Jones Newswires
November 22, 2019 12:55 ET (17:55 GMT)
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