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Starting at $60,990, Tesla's Cybertruck is priced 50% higher than initial estimate

(Reuters) -Tesla's long-delayed Cybertruck will be priced starting at $60,990, over 50% more than what CEO Elon Musk had touted in 2019 and a cost analysts have said will draw select, affluent buyers.

The truck, made of shiny stainless steel and shaped into flat planes, is partly inspired by a car-turned-submarine in the 1977 James Bond movie "The Spy Who Loved Me," Musk has said.

Its new body material and unconventional, futuristic styling has added complexity and costs to production, and threatens to alienate traditional pickup truck buyers who focus on utility, experts say.

But Musk, who has priced the vehicle's three variants between $60,990 and $99,990, said on Thursday the Cybertruck has "more utility than a truck" and is "faster than a sports car."

He drove a Cybertruck onto a stage to cheers from the crowd and later handed over vehicles to about a dozen customers at an event in Austin, Texas.

"Finally, the future will look like the future," he said about the truck's design, showing a video of the Cybertruck towing a Porsche 911 and beating another gasoline-powered 911 in a short race.

Tesla shares fell 2% in extended trading after closing off 1.6% at $240.08.

Musk did not announce the vehicle's prices at the event, but Tesla's website listed the prices. Its highest performance variant, the 'Cyberbeast' will be available next year, as will the all-wheel drive trim that starts at an estimated $80,000.

The cheapest rear-wheel drive version with an estimated starting price of about $61,000 will be available in 2025.

"This is going to appeal to ... definitely a wealthier clientele that can afford the price point and they want something that is unique and quirky," said Jessica Caldwell, head of insights at auto research firm Edmunds.

"That just isn't a large segment of the population that can afford that especially where interest rates are."

FILE PHOTO: Tesla store shows new Cybertruck in California
Tesla store shows new Cybertruck in California

After Musk estimated in 2019 that the Cybertruck would sell for $40,000, the vehicle drew more than a million reservation holders who put down $100 deposits. He had not offered an updated price before Monday, despite rising raw material costs for EVs.

New deposits are $250, Musk said on Thursday.

The price is not a surprise to many, said Paul Waatti, an analyst at consultancy AutoPacific. Waatti told Reuters before the event that the Cybertruck would do well with a smaller audience.

GRANDSTANDING SHOWPIECE

Cybertruck, two years behind schedule, enters a hot pickup truck market to compete with the likes of Ford's F150 Lightning, Rivian Automotive's R1T and General Motors' Hummer EV.

Rivian's R1T has a starting price of $73,000, while the F-150 Lightning starts at about $50,000. The larger and more powerful Hummer EV pickup costs more than $96,000.

The Cybertruck, Tesla's first new model in nearly four years, is critical to its reputation as a maker of innovative vehicles. At a time when the company is battling softening electric vehicle (EV) demand and rising competition, Cybertruck is also key for generating sales, though not to the extent of the company's high-volume Models 3 and Y.

Musk tempered investor expectations about the product last month citing problems in ramping production and warning that it would take a year to 18 months to make it a significant cash flow contributor.

Ahead of the launch, Musk captured media attention on a different subject, giving a profanity-laced interview to the New York Times on Wednesday. He cursed advertisers who left his social media platform X, formerly known as Twitter, because of antisemitic comments.

On Thursday, he said about the truck: "It's basically an incredibly useful truck. It's not just some grandstanding showpiece like me."

FILE - Tesla CEO Elon Musk introduces the Cybertruck at Tesla's design studio in Hawthorne, Calif., on Nov. 21, 2019. Many people are puzzled on what a Elon Musk takeover of Twitter would mean for the company and even whether he’ll go through with the deal. If the 50-year-old Musk’s gambit has made anything clear it’s that he thrives on contradiction. (AP Photo/Ringo H.W. Chiu, File)
FILE - Tesla CEO Elon Musk introduces the Cybertruck at Tesla's design studio in Hawthorne, Calif., on Nov. 21, 2019. (AP Photo/Ringo H.W. Chiu, File) (ASSOCIATED PRESS)

UNIMPRESSIVE RANGE

The Cybertruck's longest-range version can drive an estimated 340 miles (547 km), and comes with a "range extender" or extra battery pack that extends its range to 470 miles.

In 2019, Musk had said the truck would be able to travel 500 miles or more on a single charge.

"As a truck, the Ford and Chevy are more useful and certainly easier to see out of," said Sam Abuelsamid, principal research analyst at Guidehouse Insights.

"Given that Teslas almost always fall short of (range) estimates in real world driving by anywhere from 10%-20%, I wouldn't expect the longest range version of the Cybertruck to achieve more than 300 miles on the road," he said, noting that the Chevrolet Silverado EV is capable of exceeding its 450-mile rated range.

Musk has said Tesla was likely to reach a production rate of roughly 250,000 Cybertrucks a year in 2025. He did not update that on Thursday.

During its 2019 reveal, Tesla's chief designer Franz von Holzhausen took a metal ball to demonstrate the truck's unbreakable "armor glass" window, only to shatter it.

Holzhausen on Thursday lobbed a baseball at the Cybertruck window that bounced off.

(Reporting by Akash Sriram in Bengaluru, and Hyunjoo Jin and Abhirup Roy in San Francisco; Writing by Sayantani Ghosh; Editing by Bill Berkrot, Peter Henderson and Deepa Babington)

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