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Sunday, August 1, 2021

F-150 Lightning: A Threat To Rivian, Not Tesla

Big players and startups alike are jumping into the electric truck market: Tesla Cybertruck, Ford F-150 Lightning, GMC Hummer Electric, Chevy Silverado EV, Rivian R1T, Canoo Pickup, Nissan Titan Electric, Atlis XT, Lordstown Endurance, Bollinger B2, Hercules Alpha, Fisker Alaska, Alpha Wolf...

2021 is turning out to be the year of the electric truck, well... at least the electric truck hype. We'll see which ones come to market and which ones follow the Nikola Badger and disappear (looking at you Lordstown). 

Ford recently revealed their F-150 Lightning electric truck and the EV media is swimming with Cybertruck vs Lightning articles. I see the headline appeal :: America's best-selling truck goes electric to take on Tesla, the innovative electric up start.

Despite the headline narrative, this seems like the wrong comparison to me. If you are interested in the Cybertruck, then Ford's offering is not likely to sway you. Similarly, if you are interested in a normal-looking truck like the Lightning, you are not interested in the Cybertruck. The Cybertruck is a divisive love-it-or-hate-it wedge design. It literally looks like a wedge and the design acts as a figurative wedge. Certainly, you can compare them on price and range and other factors to pump a story out, but the actual cross-shopping audience is likely very small.

An overlooked aspect of Cybertruck's quirk design is that this allows Tesla to sidestep this head-to-head fight with the electric offerings from the legacy automakers.

The EV startups, not Tesla, are the ones that should really be frightened by the launch of the Ford Lightning. Let's look at one electric truck startup in particular, Rivian. Truck buyers are among the most loyal of brand shoppers, which puts Rivian in a tough spot. If buyers were dedicated to a brand (Ford, Chevy, Nissan...) but wanted an EV pickup, then they are likely to wait for an EV pickup in their favorite brand (F-150, Silverado, Tundra...). 

So this leaves Rivian only with the truck buyers that are not as brand loyal, the ones that are willing to take a chance on a start-up when purchasing the most expensive thing, other than a home, that most people ever buy. If Ford didn't have an EV pickup coming out soon, maybe this would have left the door open for Rivian to woo buyers as their current gas-powered trucks aged. This is how Tesla was able to move into the luxury car market, there was a void of EVs from the majors and Tesla was able to thrive in a space with little-to-no competition for nearly a decade until they eventually reached escape velocity.

This time, however, the majors don't want to allow a startup to take away their most profitable market. They are going to move in with products that will suck the oxygen out of the room, leaving startups gasping for air. 

I guarantee you that the list of EV trucks on the market in 2025 will not be the same list at the start of this article. Most of the start-ups will be acquired or go under. The Fisker Alaska might be Baked Alaska by then; Canoo might float away, Rivian might reach the river's end, the B2 might bomb, the Endurance might run out of steam, the sky may crash around Atlis, and Hercules might not complete the 12 labors. The well-funded startups (like Rivian) have a chance, but Ford and Chevy are not going to make it easy on them. 

Disclosure: I'm long TSLA

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