November 27, 2019 / 5:56 AM / 9 days ago

Gamblers back Tesla in Ford tug of war as orders reach 250,000

(Reuters) - Orders for Tesla Inc’s electric pickup Cybertruck are inching closer to the record set by the company’s Model 3 sedans in 2016, with company head Elon Musk signaling 250,000 customers have now lined up to buy the new vehicle less than a week after its launch.

FILE PHOTO: Nov 21, 2019; Hawthorne, CA, U.S.A; Tesla CEO Elon Musk unveils the Cybertruck at the TeslaDesign Studio in Hawthorne, Calif. Mandatory Credit: Robert Hanashiro-USA TODAY/File Photo

The flood of reservations has been encouraged by Tesla’s cut-price $100 deposit to place a booking and a steady drumbeat of promotion from the Silicon Valley billionaire to his millions of social media followers.

Musk tweeted “250k” on Tuesday night in an apparent reference to the number of orders. The company did not immediately confirm that figure on Wednesday.

Ford Motor Co executive Sunny Madra has also pitched in by challenging Musk via his Twitter account to an “apples to apples” tug of war between the Cybertruck and a comparable Ford F-150 pickup.

At the Cybertruck launch last week, Musk showed a video of the Tesla vehicle winning a tug of war and dragging a Ford truck uphill. He said he would happily hold another contest next week.

One online bookmaker on Wednesday had Tesla as favorite to win a contest at odds of 5 to 2 on.

Tesla’s shares were up marginally on Wednesday afternoon, but still down around 7% since the vehicle’s launch last Thursday.

“Sunny’s tweet was tongue in cheek ... nothing more,” a Ford spokesman said.

“With America’s best-selling truck for 42 years, we’ve always focused on serving our truck customers regardless of what others say or do. We look forward to our all-new F-150 hybrid coming next year and all-electric F-150 in a few years,” the spokesman said.

Tesla opened bookings immediately after the unveiling and allowed potential buyers the option to reserve three versions of the truck priced at $39,900, $49,900 and $69,900. It plans to start manufacturing the truck around late-2021.

The reservation price compares to $1,000 that the company charged to book a Model 3 in the months after its much-hyped launch three years ago.

“The $100 Truck reservation is Tesla admitting preorders are meaningless,” Roth Capital analyst Craig Irwin said.

Tesla claimed it had 455,000 reservations for the Model 3 in 2017 before it started selling and it had sold 275,000 of the cars by the second quarter of this year.

Gordon Johnson, an analyst at GLJ Research, said the Cybertruck would likely have a much lower conversion rate of actual purchases to orders.

Musk’s tweets have hinted that Tesla will employ new techniques to build the Cybertruck, which is made of stainless steel used in rockets.

The Cybertruck’s angular futuristic design has polarized opinion, with some analysts saying it had no chance of drawing in the sort of mass audience that has made pickup trucks the U.S. car industry’s best-selling vehicles.

Reporting by Ismail Shakil and Supantha Mukherjee in Bengaluru; Editing by Subhranshu Sahu and Patrick Graham

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