The US truck market has gone undisrupted for decades mostly due to the chicken tax. Bring on the Cybertruck!
We’ve been waiting now for a few days to hear the official word from our good friend Sean Mitchell about his take on the Tesla Cybertruck. At first, we heard he wasn’t going to attend the debut event since he didn’t get an invite. Then, somehow, things worked out in his favor.
Following the reveal event, Mitchell was at a loss for words.
He seemed as though he didn’t know whether to love or hate the Tesla electric pickup truck concept. We weren’t surprised since we felt the same way.
We’ve learned that, for many people, forming an opinion about the Cybertruck has taken some time and consideration. Whether you’ve decided to love it or hate it, there’s no escaping the fact that it’s absolutely unique, innovative, and capable.
Being that there has been so much coverage (positive and negative) about the Tesla pickup truck, Mitchell did some homework and approached his latest video share from a different angle. He speaks to the “chicken tax” and how it relates to the Cybertruck.
After watching the video, we connected with Mitchell and he shared:
“Important note that I forgot to mention in the video is that the import tax on foreign sedans is only 2 1/2%, yet the import tax on foreign trucks is 25%.”
At any rate, check out the brief video and Mitchell’s text and sources below, then let us know your thoughts in the comment section.
Video Description via Sean Mitchell (All Things EV) on YouTube:
Tesla Cybetrtruck recap and how it relates to a tax on chicken
First of all I want to thank Tesla for the invite to the event. Initially it looked like I was not going to get an invite, but through the generosity of some friends, I received one. I’m thankful I did because the event reminded me of how great the Tesla community is. I got a chance to hang out with some many great friends.
Now, a quick take on my initial impressions. I honestly thought when that truck came on stage it was a live Punk’d episode. At some point during the presentation Elon would stop and say “jk guys, here’s the real truck.” That never happened.
So, we’re left with this odd, futuristic truck with out-of-this world performance specs – and it trumps any traditional internal combustion engine truck by wide margins.
In this video I want to talk about the significance of Tesla’s Cybertruck and how it relates to a tax on chicken – yes, chicken.
Back in the 1960s German farmers were concerned that their local chicken industry was being eroded buy American chicken exporters who were importing their frozen chicken for less. The American chicken was significantly undercutting the local German chicken market so the industry asked the German government to fight back. So, they imposed a 50% tax on imported chicken.
In retaliation, the US, under Lyndon B. Johnson as president, imposed, among other items, a 25% tax on foreign light duty pickup trucks being imported to the US. The US had the VW bus in mind. This tariff was dubbed the chicken tax.
This 1964 tax still ironically exist today, which is one reason why American trucks dominate the segment. 80% of the top 10 best selling trucks, according to JD Power, are American. It’s also helpful to mention trucks have some of the best profit margins for American car makers because of the chicken tariff.
To put it another way, the truck segment that has gone undisrupted for more than 55 years due to lack of innovation.
This is why Tesla’s Cybertruck is so important. They’re entering a market that has gone nearly unchanged for more than half a century. This is a literal goldmine for Tesla as 1.5m of them will be sold this year alone. All they have to do is create a truck that is at price parity or better with their competition, has a cost of ownership less than their gas competition, and performance that makes any other truck look like a child’s toy.
Though I am not a truck person and the design is quite different from what people are used to a truck looking like.
The question is, will it be like Google Glass where it fades away as a flash in the pan or like AirPods that become a cultural phenomenon. Here’s how an April 2019 Market Watch article once described the AirPods, “Continuous and repetitive exposure will eventually make them seem as normal as apple pie. The more people who use them, the less odd they seem.” Much like the AirPods, I suspect the Cybertruck will find it’s home in pop culture.
Sean Mitchell, All Things EV. Thanks so much for watching, see you on the next video.
Chicken Tax Sources:
Planet Money: https://www.npr.org/sections/money/20…
Today I Found Out: https://youtu.be/Yc7YKYWLXww