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Tesla’s Road to Electric Trucking May be Easier Than Many Assume

Tesla wheel

The leap to electric trucks for Tesla Inc. and others isn’t as improbable as many in the trucking industry assume.

That’s the finding of an investment report issued Wednesday by Alexander Potter, an analyst at Piper Jaffray & Co.

The key, Potter said, is that much of the trucking industry overestimates weight needs. That leaves room on trucks for the weight of the large battery packs that provide power for electric vehicles.

About “85 percent of the Class 8 trucks on the road in the U.S. operate below the 80,000-pound legal limit, and are therefore relatively insensitive to weight,” Potter said. “Range is a potentially more challenging problem.”

Tesla, which says it will unveil an electric truck in the heaviest Class 8 weight segment in September, can initially deal with the range issue by selling to fixed-route fleets that can have charging infrastructure at their depots.

Potter analyzed the incremental weight associated with switching to an electric powertrain.

“We think many trucks could make the transition to an electric drivetrain without adding more than 4,000 pounds in gross weight,” Potter said.

And he called the estimate conservative because it assumes manufacturers and carriers are not making any efforts to shave weight from their vehicles.  Potter believes the trucking industry can “easily” find weight savings of 2,000 pounds in a semi-tractor and trailer package.

“We have concluded that making the transition to EVs will NOT be too heavy for most fleets to stomach,” Potter wrote in his report.

In fact, most fleets don't care how much their trucks weigh, Potter said.

“There is a misperception that fleets obsess over vehicle weight,” he said. “Some fleets will rightly disagree with this statement, but in fact, only a small portion (2 percent to 7 percent) of trucks frequently operate near the 80,000-pound maximum allowable combined weight limit,”

Most of those are bulk haulers that have revenue tied to the mass of the commodity they are delivering.

“But such fleets are rare,” Potter said. “Most fleets run out of space in their trailers long before they approach the 80,000-pound pound threshold.”

He estimates that 80 percent of Class 8 trucks haul less than 70,000 pounds. That leaves lots of room to absorb the weight of electric vehicle components.

“If these fleets cared so deeply about minimizing vehicle weight and maximizing payload, then they would be mimicking bulk haulers by investing in lightweight trucks,” Potter said. “But they aren't.”

A bigger wrinkle is that electric big rigs are unlikely to ever reach the 1,500-mile range that much of the trucking industry believes is needed for long haul routes. Some fleets carry twin 150-gallon diesel tanks that can extend a truck’s range even beyond that.

But in his research, Potter found that many fleets leave their twin 150 gallon tanks partially unfilled, and some fleets that run fixed/visible routes can happily function with only 50 to 100 gallons of on-board diesel for a range of 300 to 600 miles.

“If Tesla focuses on medium- to long-haul fleets like this, we think the payback will be compelling,” Potter said.

Elon Musk, Tesla’s chief executive, briefly talked about the Palo Alto, Calif., electric vehicle company’s plans for an electric truck earlier this month.

He said the vehicle will leverage the use of parts from other Tesla autos – namely the upcoming Model 3 compact sedan and that will be built by Tesla.

He claimed it will be more profitable than traditional Class 8 trucks.

Musk said he is focused on building a semi-truck before a light-duty pickup because he wants to demonstrate that electric transport can even work as a heavy-duty commercial vehicle.

Traditional truck manufacturers also are looking at building electric rigs.

Daimler Trucks unveiled the Mercedes-Benz Urban eTruck last year and has already begin building a small batch of the vehicles, which can haul up to 26 tons. The company will go into full production by 2020 if demand allows.

Peterbilt Motors Co. is showing a battery-electric Class 8 garbage truck at the WasteExpo 2017 in New Orleans this week. Others already actively marketing electric refuse trucks include Motiv Power Systems, Wrightspeed Inc. and BYD.