by Of Alan Ohnsman
Elon Musk belatedly celebrated the launch of the Tesla Semi last December in his favorite way: a live-streamed event that began with electronic dance music punctuated by his rant about the electric truck’s “sick” appearance and performance. “unplayed” in front of an audience of Tesla employees and fans who were ready to applaud. Executives from PepsiCo and a unit from Frito-Lay were there to recover vehicles, bringing fries and drinks to the party.
“This thing has insane power compared to a diesel truck,” Musk told attendees at Tesla’s Gigafactory in Sparks, Nevada. “And it’s not slow at all. It’s fast. It accelerates fast. It’s quick to brake. It’s really a step up in what it’s like to drive a van.”
Maybe. But in terms of sales, the Semi remains slow. The company hopes to produce at least 50,000 a year by next year, generating up to $12.5 billion in revenue based on an estimated price of at least $250,000 per truck. To date, however, Tesla (with revenue of $81.5 billion last year) has only delivered about three dozen trucks to a publicly identified customer and has not included the model. in its last two quarterly production reports.
Tesla, whose CEO has rarely seen a government incentive and disliked it, is leaving money on the table: The Tesla Semi is not among the zero-emission trucks eligible for California’s generous $120,000 incentives for battery-powered pickups (and $240,000 for hydrogen models). Not because it doesn’t qualify, but because the company isn’t even enrolled in the program, according to the Air Resources Board.
The Semi was also absent at last week’s ACT Expo in Anaheim, Calif., the nation’s largest show for zero- or low-emission trucks and vans. That’s not unusual given Tesla’s habit of avoiding major auto shows and trade shows. But dozens of high-tech battery and hydrogen-powered pickup trucks from companies including Volvo, Hyundai, Daimler, Peterbilt, Kenworth, Hino, BYD and start-up Nikola were on display. And Tesla was conspicuous by its absence.
“One of the things that was notable about this report is the complete lack of product commentary from Tesla,” said Oliver Dixon, senior heavyweight analyst at research firm Guidehouse. “What was once thought to be the 800-pound gorilla in the room is still a gorilla in the room, but noticeably smaller than it was.”
Battery and hydrogen truck market grows as California bans new diesel commercial vehicle sales in the state until 2036 and only allows zero-emission models until mid-1990s 2040. However, it is unclear when to increase sales. A survey of fleet operators by research firm Gladstein, Neandross & Associates presented at the ACT Expo last week found that orders for electric pickup trucks currently stand at just 6,000 units over the next few years, d worth about $1.5 billion, up from virtually zero last year. By the mid-2030s, as battery-powered and hydrogen-powered trucks catch up with diesel models in cost, they will dominate heavy-duty vehicle market sales, accounting for more than 200,000 units per year, according to a report. National Renewable Energy Laboratory study. It will be a market worth more than $40 billion a year. The push for zero-emission trucks will go beyond California, as more than a dozen states, including New York and Washington, follow its tough air pollution rules and could pass similar regulations. for trucks.
Tesla has had a chance to dominate the new electric truck space the same way it led the way in battery-powered passenger vehicles. Still, early indications show it is lagging behind competitors in the nascent sector, despite Musk’s drumbeat. California saw just 134 battery-powered pickup truck sales in 2022. Of those, most were made by China’s BYD — none by Tesla.
Shortly after the Semi was unveiled at a spectacular event in Los Angeles in November 2017, several companies with large truck fleets announced plans to purchase thousands of models. Almost six years later, they are still waiting. Trucking giants Ryder and JB Hunt told Forbes they don’t know when they will start taking delivery of the trucks. UPS said it is in talks with Tesla and hopes to start taking them in 2024.
The company did not respond to a request for comment on the Semi program and its estimated sales this year.
Tesla also did not provide Semi production and sales details during its March 1 investor conference call or April 19 quarterly earnings update. In the company’s latest filing with the Securities and Exchange Commission, the only reference to Semi in the 34-page document is that it is in “pilot production” at Nevada’s Gigafactory. Usually this is an industry term for a model that is not yet a commercial product.
Tesla says the Semi is available in versions ranging from 300 to 500 miles on a full and fully charged charge. These figures, as well as Tesla’s claim that users could save $200,000 in fuel over three years, have not been independently verified. The company did not give a price for the vehicle, its weight or the number of tonnes of cargo it can carry. At an April event in Sacramento, Pepsi told local reporters the trucks traveled 400 miles per charge.
Cloudy production regime
Last November, before delivering the trucks to Pepsi and Frito-Lay, Musk said production of the Semi would ramp up through 2023. “As I think everyone knows at this point, it takes about a year to ramp up production. . We are tentatively targeting 50,000 units in 2024 for the Tesla Semi in North America.”
Then, in January, the company announced it would build a dedicated Semi assembly line at its Nevada plant as part of a $3.6 billion expansion. Musk said production would be “limited” this year but hit high volume next year, without giving further details.
“The production pace of the Tesla Semi has been very slow and Wall Street expects an increase in the second half,” said Dan Ives, equity analyst at Wedbush Securities. “The demand is there. The problem is their production, which has been disappointing.”
PepsiCo, the only semi-publicly identified buyer so far, said it plans to acquire 100 this year. Representatives for PepsiCo and Frito-Lay did not respond to numerous requests for comment on truck purchases and performance.
By comparison, smaller competitor Nikola, which also sells battery-powered vans, built 258 Tre BEVs last year and delivered 131 to dealers. The company said this week that it plans to build up to 500 battery and hydrogen fuel cell pickup trucks by 2023.
Tesla didn’t say much about the Semi’s sales stats, but the National Highway Traffic Safety Administration did share some details. In March, the Safety Regulator recalled the Semi for a parking brake malfunction that could have caused the bulky vehicle to tip over. In doing so, he revealed that there were only 35 semi-finals outstanding. (Battery-powered trucks from Nikola and Volvo were also subject to early recalls.) A separate Tesla filing with the US Department of Transportation shows the company has a fleet of 291 trucks, though many of them they’re probably prototypes she’s been testing since Musk first introduced her. in 2017 and said they would be sold by 2019. This fleet filing also reveals that nine people were injured in Tesla-owned trucks, although it did not specify the brand.
Tesla has not subscribed to Clean Truck government incentives
Pepsi touted its Tesla Semis, particularly the 18 trucks it acquired in April, as proof the company is greening its fleet because it cares about the environment. But these early trucks were heavily subsidized with public funds. So far, it has received $5 million for 18 tractor-trailers and charging systems at its Sacramento plant, where there is a bottling plant, and $5.3 million for 15 trucks and loaders at the Frito-Lay snack factory in Modesto.
The Tesla Semi also qualifies for a $40,000 federal zero-emission truck tax credit created by the Cutting Inflation Act. The need for large subsidies raises some questions about the adoption of the Semi and its battery-powered competitors in areas where such incentives do not exist.
“We enable these fleets to incentivize companies to acquire these cleaner, zero-emissions technologies that otherwise probably wouldn’t happen without government subsidies,” said Alberto Ayala, executive director of the quality management district of Sacramento Metropolitan Air. The Tesla Semi costs around $250,000, he said.
In the Los Angeles area, home to the most cars and utility vehicles in the country, the South Coast Air Quality Management District said it has provided subsidies for customers to purchase electric trucks Volvo. He told Forbes he has no request to buy Tesla Semi.
Despite California’s incentives and new regulations, it will be difficult to steer the trucking industry away from diesel. Indeed, electric and hydrogen trucks are always more expensive, even with generous incentives. Then there’s the cost of installing high-power charging stations to serve multiple trucks at once, and the need for a more powerful network to handle the 750-kilowatt charger used by Tesla’s truck. For hydrogen fuel cell models, which promise longer range and faster refueling times than battery-powered models, the main issue is reducing the cost of hydrogen and finding cheaper ways to transport and store fuel.
If Tesla does eventually start production of the Semi, there’s another challenge for it and newcomers like Nikola: persuading fleet owners to switch from traditional suppliers like Peterbilt, Volvo, Daimler and Freightliner who have their own green trucks. .
“You have a number of veteran players who have been around for a while,” Guidehouse’s Dixon said. “For a non-legacy player, like Tesla, Nikola or whoever, to come in and get market share, they’re going to have to get it from these guys. They’re very nice people to talk to, but they don’t play particularly well”.
