Elon Musk and Tesla Inc. unveiled a line of heavy-duty electric trucks last week, saying they will be less expensive to operate than comparable diesel vehicles and, with 0-to-60 mph times unheard of in the trucking industry, a lot more fun to drive.
Michael Baudendistel, the veteran trucking industry analyst at Stifel Financial Corp., dissected Tesla’s presentation in a former aircraft hangar in an industrial area near Los Angeles on Thursday and warned truckers and motor carriers to hold onto their checkbooks a little while longer.
Many questions need to be answered before potential buyers will know whether the Tesla Semi makes sense. Musk said the truck’s total operating cost will be $1.26 per mile, compared with $1.51 per mile for a diesel truck.
Tesla presented only specifications “selectively marketed at the unveil alone (e.g., a 500-mile range, a two-year payback period,” to make the vehicle look attractive, Baudendistel wrote in a report to investors.
Here’s what Baudendistel says the trucking industry still needs to know.
What is the price?
“It wasn’t disclosed. Tesla cars don’t need to prove an economic case to their buyers, but Tesla trucks will — assessing the potential [return on investment] starts with price,” he said.
How much does it weigh?
“Disclosing the vehicle range without the weight really tells us very little. A fundamental issue with electric vehicles is that the batteries are heavy, which reduces available payload capacity. We think it is reasonable to believe there may be a 10,000-pound battery pack in the Tesla tractor with a 500-mile range, or a 700 kWh battery pack.”
Weight savings from ditching a diesel engine, 2,500 pounds, 240 gallons of fuel, 1,700 pounds, and a transmission, 900 pounds, especially, will offset some of the battery, Baudendistel wrote. But a battery pack of that size would almost certainly cut into the payload capacity of the truck.
What assumptions go into the total cost of ownership and payback calculations?
“Not having answers here is a non-starter,” he said. “Tesla claims a diesel truck will be 20% more expensive to operate than its electric semi, but the company offers little information to support that claim. Outside of vehicle price, our key questions here are around the assumptions for miles driven and the use case for the vehicle.”
When will the Megacharger network be built out?
Musk said Tesla will build an extensive network of new-technology rapid-charging stations for the truck.
“You can’t put the cart before the horse. For the company to address the (long haul) market, there needs to be a robust fueling infrastructure,” Baudendistel said.
It might not be a problem for a while. The trucks Tesla unveiled were day cabs for local and regional use and can be charged overnight at their own facilities. But Baudendistel said that will cost more than the 7 cents per kilowatt for electricity Tesla uses in its calculations. The national average is 11 cents per kilowatt for electricity used for transportation, according to financial data company Bloomberg.
Who will service the truck?
“This is an issue for all electric trucks, not just Tesla. Service is critical for commercial vehicle buyers as downtime can be among the most expensive costs of equipment. Buyers of Freightliner, Volvo, International, Kenworth and Peterbilt trucks, for instance, can rely on in-house maintenance as well as robust dealer and service networks,” Baudendistel said. “Tesla, of course, does not have a network built out for that purpose.”
Who are the suppliers?
Commercial truck buyers, “are generally uninterested in the 0-60 mph time, which received a lot of focus from Tesla at the unveil,” he said. “And, unlike consumers, commercial vehicle buyers put significant focus on details well beyond the engine, instrument cluster, and cup holders. Fleet buyers will want to have as much input as possible in spec’ing axles, brakes, and other features, as trucking is not a ‘one size fits all’ market.”
(Musk said that unloaded, the truck can go from 0 to 60 mph in 5 seconds. That goes to 20 seconds with a loaded trailer.)
What market is this vehicle targeting, exactly?
“The presentation and lack of a sleeper compartment indicate local and regional, but the shape and size appear built for long-haul on-highway applications and not nimble enough for city streets.” Baudendistel said. “We would need more information from the company before being able to assess the viability of the truck in different vocations.”
Where does the truck rank on Musk’s priorities?
“We’re guessing lower than ramping up production of the Model 3 but higher than colonizing Mars and the hyperloop,” Baudendistel said. “It’s possible production will fall behind the 2019 target laid out.”