After its unveiling on Thursday night, Tesla's (NASDAQ:TSLA) Cybertruck saw a mixed reception (at best) in the news and across social media. The market was certainly disappointed, as Tesla shares dipped 6% on the day following the truck's unveiling.
But is the polarizing truck growing on people? Less than 48 hours after the big reveal, Tesla had racked up 146,000 reservations for the vehicle. By Sunday, reservations hit 200,000. Further, the stock's decline has notably come to a halt. Shares are up 1.3% as of this writing on Monday -- well above the S&P 500's 0.6% rise.
Could Cybertruck be a hit after all?
While it's impressive that Tesla has already hit 200,000 Cybertruck reservations, investors should note that the company is only requiring a $100 refundable deposit to commit to a reservation. This compares to the $1,000 deposit Tesla required for customers to get in line for its Model 3 in 2016.
Still, garnering 200,000 reservations within a few days of the truck's unveiling is a notable achievement. By comparison, Tesla said it had accumulated 373,000 reservations for Model 3 within a month and a half of its unveiling.
Even if a meaningful portion of these customers canceled their orders, this would still represent a significant revenue opportunity for the electric-car maker. When CEO Elon Musk said on Saturday afternoon that Cybertruck reservations had reached 146,000, he noted that 42% of preorders were for its dual motor version, which starts at $49,900; 41% were for its $69,900 tri motor version; and 17% were for the $39,900 single motor version. Extrapolating those percentages to 200,000 reservations, these preorders could convert into $8 billion -- and that's if none of these customers pay for upgrades beyond the battery capacity and motor configurations they select.
The customer interest is particularly interesting in light of the vehicle's timeline. Tesla doesn't even plan to start producing the vehicle until late 2021, with production of the tri motor version not expected to begin until late 2022.
An impressive marketing feat
Even this initial wave of customer interest might not adequately define the market opportunity for Tesla. If many of these interested customers are not typical truck owners, it could be difficult to sustain high levels of demand beyond first-year availability. Further, there are always risks to Tesla's execution when it comes to bringing this vehicle to market; its stark difference in design compared to current Tesla models could make ramping up production more difficult than anticipated.
Still, one thing is certain: The truck's unveiling has proved a brilliant marketing achievement. As Musk said on Twitter over the weekend, these reservations occurred without any paid advertising or endorsements. The vehicle has undoubtedly brought more attention to the company's brand.