The executive publisher of the famed Kelley Blue Book says Elon Musk’s new Tesla CyberTruck is a risk worth taking.
“He's doing something totally unconventional,” Karl Brauer told Yahoo Finance’s YFi AM on Friday. “And, at this point ... there's no downside to that. He's going to cause a stir, and people are going to think about this truck.”
At an event in Los Angeles on Thursday, Musk unveiled the unconventional truck — and the truck’s “armor glass” notoriously smashed during a demonstration.
Brauer recognizes that selling this new SUV won’t necessarily be easy for Musk. That’s because the target consumer may not be willing to trade in their vehicle for something more efficient made by Tesla (TSLA).
“Truck buyers are the most traditional buyers out there. They're the most loyal buyers out there. So for him to be able to come in with something this unconventional and pull traditional truck buyers out of their comfort zone, probably a big challenge.”
Having an electric vehicle could also be tricky for people who like to spend time off-roading. Brauer believes this SUV may be a better option for people in a more urban environment.
“The only thing worse then running out of energy in an electric vehicle is running out of energy in the middle of nowhere. If you're going to drive around the city, and you're going to haul a bunch of things, and you want to not burn a lot of fuel and put out a lot of emissions, something like the CyberTruck would be great.”
Tesla will have plenty of competition in the car space, especially when you look at so many options already on the road. The Kia Telluride, which won Blue Book’s best vehicle award for 2020, is just one example.
“It's an attractive vehicle. It is loaded with safety technology, even the base model, which starts at just $32,000,” Brauer says. “It's got good resale value, a 10-year/100,000-mile warranty, like all Hyundais and Kias have. And it just — it brings everything together.”
No car manufacturer like Ford, Audi, BMW and Honda is going to back down, especially when drivers expect more out of their automotive purchases.
“Most car companies are moving up in terms of quality and resale value and ownership costs,” noted Brauer. “That means the market's kind of — it's just getting more competitive.”