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Tonight the world will finally get to see what is perhaps the most hotly anticipated Tesla vehicle ever, the Tesla pickup truck. Elon Musk will take to the stage at 8 pm Los Angeles time to reveal a product he has described before as "breathtaking".
Rumors have been swirling for just about.... 6 years now since Elon first teased the idea of a capable electric truck made by Tesla. Dubbed by many, in fan forums and the press alike, as the "cybertruck", CEO Musk has described it as more capable than a Ford F-150 and as nimble as a Porsche 911. Lofty goals indeed.
Its design is perhaps at the forefront of the internet rumor machine. Musk said it would draw comparisons to Blade Runner, a duo of high-tech sci-fi flicks. Truck design, in general, has rarely strayed from the tried and true formula of boxy and masculine; although in recent years we've begun to see more aggressive designs vie for consumers' attention.
Some rumors go even further. However, true or not we will know for sure tonight once Tesla finally makes its big reveal.
Beyond the hype, why is the Tesla Truck actually important?
Why is the cybertruck just so crucial and why are investors and analysts paying so much attention to the reveal? The reason is simple: trucks dominate sales charts in the United States like nowhere else in the world.
In fact, trucks are the fastest-growing segment of vehicles in the country on top of already selling more than passenger sedans and coupes. Perhaps it's better to visualize just how dominant trucks are in America:
The F150 simply blows everything else out of the water. When you combine the 3 major brands' trucks they account for about half of the top ten sales. Tesla, of course, is keenly aware.
The numbers are simply staggering. Now keep in mind that the average transaction price in 2018 for full-size pickups was $47,987 according to freep.com. Make no mistake, trucks are a major margin booster for the Detroit 3: Ford (NYSE:F), Ram (NYSE:FCAU) (formerly Dodge), and General Motors (NYSE:GM).
The last consideration I would have you weigh is that as I mentioned, the segment is actually growing despite the average price of trucks standing a cool $20k above that of passenger vehicles. In 2012 trucks represented about 13% of total sales, by 2018 that figure was closer to 18%.
So we have a segment of vehicles that sell more than any other, are more expensive than any other, and are continuing to grow.
That's why it's so big for Tesla. The company knows how to ramp production, considering that in 2018 it sold 245,000 vehicles - the same as it had in all years previously in its history... combined.
That means Tesla sold 1.4% of all vehicles in the U.S. in 2018. Don't forget that it was ramping Model 3 production through that year.
Let's say Tesla can work its magic in the truck segment. About 3 million trucks were sold in the U.S. last year - if we assume Tesla can capture 1.4% of that we are talking about 42,000 cybertrucks, which will no doubt come at a premium versus its gasoline counterparts. If we use $60,000 as an average price (Elon has said the base version should be under $50,000), that would be $2.52billion in revenue that Tesla did not have previously.
That's 15% new revenue for the company. Tonight should be interesting!