Tesla Motors, named after the physicist and electrical engineering genius, Nikola Tesla, is the world’s second largest pure electric-car maker in the world, after the Renault-Nissan Alliance. Tesla is also set to take over from General Motors as the largest car manufacturer in the US.
Tesla has been taking the car industry by storm in the last few years with its high performance pure electric cars. Now, the company plans to turn the trucking industry on its head with the unveiling of its proposed pure-electric autonomous 18-wheeler semi-truck. According to Ravi Shankar, a Morgan Stanley analyst, this vehicle is going to change the shape and future of the trucking industry.
The new truck is expected to be a heavy-duty and long range vehicle, with a battery capacity of 300 miles. Analysts are predicting that instead of trying to figure out how to create massive batteries to deal with the cross country hauls that semi-trucks have to go through, Tesla will simply lease the batteries for the semi-trucks and build battery changing stations every 300 miles. An alternative to this is optional “battery swapping” or even “flash charging”. Analysts expect that making battery charging (or even swapping) infrastructure would cost the company about $0.75 billion dollars. Each charging station would need 3 robots to “man” it, and there would be approximately 1,500 stations required, spread across the country to make this plan viable. Another $1 billion will need to be spent on tools and building manufacturing capacity.
Tesla’s move towards autonomous semi-trucks is logical. The company is already using its hi-tech autopilot technology to power consumer vehicles. And this kind of technology – for long haul driving – would give approximately 70% cost savings, making it a very attractive proposition.
Analysts are speculating that the Tesla trucks will be first rolled out to a limited number of partners, with an initial offering of 25,000 units. While the trucks are not expected to be on sale before 2020, the expectation is that orders will start rolling in as soon as the prototype is revealed later in September.
Analysts are expecting this truck to be the biggest catalyst in the trucking industry ever. It will change the way the industry works, with lower cost, eco-friendly, autonomous trucks which will perform way better than human drivers. By the mid-2020s, fully electric trucks could be swamping the industry. 10% of the heavy duty Class 8 segment and 15% of the lighter Classes (5 to 7) are expected to be completely electric and mostly autonomous.
Based on an analysis of the start-up costs, operating cost, weight, range etc., for electric trucks generally, the cost of the Tesla trucks is expected to be in the $100,000 range, with a 2.9 year payback period, which could later reduce to 2 years once the industry settles down. This also fits in well with the fleet companies’ preference of an 18 to 24 month payback time frame.
While, the Tesla truck is going to be a game changer, competition is already brewing. Cummins Inc., a major player in the trucking industry, revealed its new electric drive system last month. Toyota Motor Co. unveiled its working prototype Class 8 fuel-cell electric truck recently. Daimler is planning to unveil its prototype of an urban electric truck as is Fuso at an event in New York on September 14.
Tesla will still have to tackle difficult issues like figuring out how to increase battery life to tackle the 600-700 mile-long haul sectors, as well as how to reduce battery charging time.
Tesla’s shares (TSLA) have already grown 61% this year.