Tesla will unveil their Semi-Truck in November of 2017 but will it be successful?
Today we’re going to look into what we know about the Tesla Semi and what impact it may have on the Trucking industry here in America.
The Tesla Semi is rumored to get between 200-300 miles per charge and drive like a race car. At this range, it technically falls into the “long haul” category of trucking but just barely.
Tesla pushed back the unveiling of the Semi from Oct to Nov citing Model 3 Production Bottlenecks and battery shipments for Puerto Rico, but several key details have been leaked by people close to Tesla.
First, we have a spy shot taken which appears to match the teaser image Tesla released earlier this year.
And recently we have a video of a Test Mule which is rumored to be the Tesla Semi w/ a fake facia covering it to avoid suspicion. The reason people think this is the Tesla Semi is due to the lack of a loud Diesel engine, no visible exhaust, and the speed at which it takes off.
Then we have these renderings, which are probably my favorite. One discrepancy with these renderings, however, is that this rendering includes sleeping accommodations in the vehicle which contradict what Scott Perry, an executive at Miami-based fleet operator Ryder System Inc said after his meeting with Tesla. If the truck can only go 200-300 miles, you won’t need sleeping accommodations in the vehicle since it will just cover shorter trips.
The major challenge Tesla will face relates to the economics of the trucks themselves. A typical Diesel Cab costs around $120K before you factor in fuel, maintenance, and the driver cost. If Tesla wants to compete in this industry, they’ll need to sell their cabs for no more than 225K according to a report on Teslarati. The report here cites the benefits of reduced fuel and maintenance costs resulting in a ROI after about 5 years time.
This is in contrast to what Adam Jonas, a Morgan Stanely Analyst said when he estimated it would be around $100K and 70% cheaper to operate. Jonas and a few others believe that Tesla will sell the cab separate from the batteries. Opting to lease those separately presumably to recycle them and gain margin by reducing the costs over time. This could be a great strategy as well as the possibility that one day these trucks will be self-driving. Tesla is looking to reduce costs of shipping with by eliminating the most expensive part, the driver. As well, if the vehicles are smart enough they can use a tactic known as platooning which increase the efficiency of the trucks behind a lead vehicle.
This is similar to drafting in auto racing where, if you’re close enough, you can increase efficiency due to reduced drag. If they pull this off, it really would be a game changer for the industry. It could be a little scary too.
But why would Tesla go this route in the first place? It seems strange to go from making consumer automobiles to commercial. In short, there’s tons of money on the table here. In 2016 the Trucking industry brought in almost 680B dollars in revenue, half of which is due to the short-haul or regional routes that Tesla wants.
So if we believe these estimates the Tesla Semi could prove to be game changer for them and for the trucking industry itself One major problem with this whole plan is the manufacturing of the Semi itself.
So far the Fremont plant is bursting at the seams and wouldn’t be an excellent candidate to make the trucks so they’ll likely need to expand or open a new facility somewhere. The batteries themselves also pose a problem since each truck could require up to 600 kWh or more, about the same as 6 p100d Model S’s.
While they do have the gigafactory pumping out batteries, it’s not complete, yet so there’s a big question mark as to how fast they could make the battery packs. The next problem Tesla will likely face is adoption.
Even if they’re fortunate in producing the Semi trucks, the trucking industry is slow to change, and there are hundreds of thousands of regional operators. So the likelihood that they’ll receive as much of an ovation as they did with the model 3 is unlikely. My guess is when they officially being production they’ll have some partners lined up that are looking to buy a few trucks and see how it does.
So maybe in 5 to 7 years, this will be a prominent disruption to the trucking industry, but for now, there are lots of hurdles for Tesla to clear before it makes an impact. Interestingly enough and perhaps by coincidence, it appears lots of other trucking companies are jumping on the bandwagon here.
Daimler, Cummins, and Volkswagen all have announced their plans to make electric trucks and commercial vehicles which would compete with Tesla in this space.
Even Toyota is getting into the mix with a hydrogen fuel-cell vehicle, albeit not electric, is still a zero-emission vehicle. With all of these factors combined it is going to be interesting seeing if Tesla can make a splash in the Trucking business as it has in the consumer space.
I’d love to know what you think! Will Tesla win here or are the headwinds too powerful for them to overcome? Leave me a comment down below
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