Why Ford (NYSE: F) will Dominate the Electric Pickup Truck Market
Last weekend, I got that chance to drive my friend’s electric Ford F-150.
We had to run some errands, which included hauling a bunch of wood back to his house.
It’s starting to get chilly up here again, so it’s only a matter of weeks before we fire up the wood stoves. And everyone’s doing their final stacks while it’s still nice out.
I’ve long been a fan of the electric F-150, after seeing the one my CrossFit coach bought when it first came out. His full-time gig is fighting fires, but he pulls in some extra cash during the week coaching and running diving tours in Lake Champlain.
In any event, while electric vehicles aren’t quite as ubiquitous around here as they are in places like California, Maryland, and Washington State, adoption rates are starting to pick up. Particularly for electric vehicles that can handle our rough winters.
The electric Ford F-150 is quite popular up here, as is the Tesla Model X and the new Hyundai IONIQ, which is one of the few electric cars on the road with all-wheel drive. And I suspect that as more electric pickups hit the market, an awful lot of North Country drivers will be eager to buy them.
I know my butcher up here reserved the Tesla (NASDAQ: TSLA) Cybertruck a while back, and he’s itching to get his hands on that thing. Although who knows when it’ll actually be on the roads.
Still, an awful lot of people put deposits down on that thing. According to a recent tally, that number is now up to about 2 million.
We’ve heard that the base model will start at around $40k. But I don’t believe that for a minute.
While it’s definitely one of the coolest-looking vehicles I’ve ever seen (and full disclosure: I’m interested in buying one when it finally comes out), there’s no way Uncle Elon is going to be able to sell that thing for $40k. But since we don’t have a proper estimate yet, let’s just assume Tesla sells the base model Cybertruck for $40k, and all 2 million reservation holders buy one.
That would mean Tesla would do $80 billion in sales from just one vehicle. That’s roughly what Tesla did in total revenues for 2022.
Of course, I don’t think even half of those reservation holders will buy one because a.) Those looking for electric trucks aren’t going to wait much longer to get their new truck, and b.) it’s highly unlikely the Cybertruck will be affordable for most truck buyers that want to go electric.
Despite a run on the electric F-150 when it first came out - which resulted in massive price hikes - the MSRP has fallen back down to earth, and now you can get one for about $50k.
I’ll be shocked if Tesla can price the Cybertruck below that and have the ability to pump them out fast enough to meet expected demand.
Tesla will also have to compete with a handful of other electric pickups from legacy car makers that are coming to market in 2024 and 2025, including …
- The Dodge (NYSE: STLA) Ram 1500 REV - Estimated base model price: $60,000
- The Chevy (NYSE GM) Silverado EV - Estimated base model price $80,000
- The Electric Toyota (NYSE: TM) Tacoma - Estimated base model price $50,000
- The Ford (NYSE: F) Ranger EV - Estimated base model price: $40,000
Then there are the EV startups that plan to have new offerings in the next two years, including …
- The Alpha Motors Wolf - Estimated base model price: $36,000
- The Atlas (NASDAQ: NXU) XT - Estimated base model price: $45,000
- The Canoo (NASDA: GOEV) Pickup - Estimated based model price: $40,000
- The Rivian (NASDAQ: RIVN) R1T - Base model price: $73,000 (this one is already on the market)
Given Tesla’s reputation for quality and safety, I don’t think the company will be boxed out of the electric pickup truck market at all. As well, I suspect that most early Cybertruck buyers are going to be going for the higher-end models that come with a higher-end sticker price. For them, price is unlikely to be an issue.
But for most folks who need a truck, price will be an issue, and I maintain that the automaker most likely to take the lead in the electric truck market will be the one that can deliver an affordable electric truck - and still make a profit.
It remains to be seen which electric truck maker will come out on top, but it shouldn’t go unnoticed that Ford did get a first mover advantage, and quite frankly, already dominates the pickup truck market.
If I had to buy one today, I’d definitely go for the Ford F-150 electric, but if Tesla can somehow manage to deliver an exceptional electric truck, comparable to the F-150, and do so at a competitive price point, it could become a legitimate contender in the pickup market.
Until then, investors trying to determine which carmaker is most likely to own the electric pickup truck market would be wise to put their chips on Ford.
It’ll take some time before the company will be able to actually profit from its electric pickup truck offerings, but given its first mover advantage, coupled with its ability to scale rapidly and its sizable cash position, it’ll be quite difficult for competitors to catch up.
Assuming this strike doesn’t last too long.
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