Are Electric Trucks Doomed By Over Optimistic Manufacturers?
The Tesla Cybertruck has kicked off a feeding frenzy of manufacturers planning EV pickup trucks over the next two years. Some have never even existed, nor have they produced a single product. With this much interest and activity, there must be forecasts for seeing sales in the millions. If you thought that, you would be wrong.
Some companies like GM and Ford have the ability to manufacture over 250,000 of these trucks a year. Smaller companies like Lordstown and Rivian will see much less production as they ramp up assembly for the first time. But, according to AutoForcast Solutions, a company that analyzes the auto manufacturing sector, there will only be a market for 70,000 electrified pickup trucks a year.
Manufacturers are optimistic, but is this too much?
With gas-powered pickups getting lighter and more fuel-efficient, and gasoline staying reasonably cheap, there is not the huge demand expected. So, what do the manufacturers see that the forecasters don’t?
Tesla’s original plans called for 50,000 Cybertrucks a year to be cranked out once production ramps up to full capacity. Those plans and the forecasts of the analysts may change now that Tesla is on track to possibly pass the Tesla Model 3’s initial pre-orders of over 350,000. It already has tallied over 200,000 in the first 72 hours since the Cybertruck was revealed and orders were being accepted.
This is counter to what the analysts see. So, is this a Tesla thing? Is the cult of Elon Musk so strong that he can come up with the most radical anti-truck and still sell a million, or does the truck just resonate? And what does it mean for the other companies jumping into electric trucks?
With 3-million sales a year is there room for electrics”?
Pickup trucks with either gas-or diesel-powered engines make up roughly three million sales a year. Between midsize and full-size trucks the price range is between $30,000 and $60,000. Most of the new electric pickup trucks are floating prices of $50- to $70-thousand, as is the case with the Rivian pickup.
So, while electric trucks definitely are cheaper to operate they come in at a higher initial cost. When Rivian begins production later in 2020 it is looking to reach about 25,000 vehicles a year. Rivian’s plant has the capacity for 260,000 vehicles a year.
Both Ford and GM plan on having their EV pickups selling by the end of 2021. They have each stated their intention is to sell 40,000 per year by 2024. Also produced in Detroit will be the Bollinger Motors and Hercules Electric Vehicles trucks, and Atlis Motor Vehicles in Mesa, Arizona.
Where will all of these built trucks go?
Lordstown has an agreement with Workhorse to build its “Endurance” electric pickup. Production is estimated to begin in late-2020. As you can see there are a number of companies with a lot of electric trucks planned for production. Where will all of this product be sold? The expectation is it will sell in the US, but based on the forecasts there will be many more trucks than demand. Especially, as some of these companies have said their electric trucks will sell for $125,000.
And, speaking to price, will Tesla really sell its Cybertruck for $40,000 as Musk has stated? We’ve seen where many of his target price comments have fallen off of the mark once production begins. Model 3 is a good example of that.