Global Sector Leader, Automotive
The Future of Trucks?
Tesla is often known for bucking trends when it comes to vehicle design, and its new Cybertruck is no exception. The electric pickup truck, unveiled late last month by CEO Elon Musk, features a sleek stainless-steel body that makes it look more suitable for a sci-fi thriller than city streets.
It's a dramatic, futuristic look that’s already drawn hundreds of thousands of fans. According to recent reports, Tesla has so far received over 250,000 preorders for the Cybertruck, 187,000 of which came in just days after its debut. And with customers putting down $100 deposits, Tesla has netted over $25 million from the orders.
But while it may be winning a lot, Tesla is still struggling one critical fan base: investors. Indeed, the stock ended on a down note the week that the Cybertruck debuted, suggesting that investors may be more uncertain than the public about the pickup’s viability.
Welcome to start-up skepticism. Experts say after a number of faltering s among new firms and products this year, corporate leaders are especially challenged to win confidence on Wall Street. “Delivering on these promises is increasingly difficult to do,” says Brad Marion, global sector leader for Korn Ferry’s Automotive practice. “Investors are growing skeptical.”
Indeed, 2019 has seen a number of once-hyped startups failing to deliver on expectations—and in some cases, in epic ways. Many big-name disruptors that have started to hemorrhage money, while others find themselves beating back scandals. Even Tesla, one of the most recognizable brands in the world, has been flanked by problems, most notably with its Tesla Model 3. “Investors will grow fatigued if you continue to overpromise and underdeliver,” Marion says.
These events, experts say, have left investors more cautious than they have been in the past. “Investors are starting to look at these disruptive companies in different ways,” says Richard Marshall, global managing director of Korn Ferry’s Corporate Affairs practice. “They’re less patient about the hype and more focused on the financials.”
In other words, investors are no longer taking these startups at their word. Although public sentiment may indicate demand, experts say, it’s not necessarily a harbinger of future success, as the recent rash of faltering IPOs shows. Now, investors are placing greater emphasis on “delivering consistently and delivering without surprises,” Marshall says. “To have a successful stock, you have to be able to execute and hit your mark,” he adds.
As for Tesla, the company of course still has time meets its goals with the Cybertruck. The electric pickup won’t go into production until the end of 2021, with its tri-motor version hitting the production line in 2022.