After more than five years in development, Tesla has officially delivered its first Semi to PepsiCo—a milestone that will be a wake-up call to the trucking industry. The next five years are likely to be a windy road for traditional Class A truck manufacturers as they scramble to embrace electric.
Semi’s impact on Tesla’s business:
On Tesla’s September quarter 2022 earnings call, Elon announced that the company’s goal is to produce 50k semis by 2024. If they hit that goal, the Semi would add about $10B in revenue in 2024, or account for about 6% of total sales in that year. We think 20k deliveries in 2024 is more likely. Long-term, the Semi will likely hoover around 5% of overall Tesla sales.
Semi customers:
It’s a long wait. In 2021, Musk suggested that Semi production was on hold since it would require 5X the amount of lithium cells needed for a comparable Class 2-3 Tesla vehicle. Those comments temper our expectations about the ramp in volume of deliveries over the next couple of years. To date, PepsiCo is the only customer that has taken delivery. Other customers that placed preorders in 2017 include Walmart, Meijer (260 grocery stores) and JB Hunt (transportation services with about 12k trucks).
Tesla Semi quick facts:
- Range: 500 miles on a single charge.
- Towing capacity: Up to 82k lbs, which is the most weight allowed by law.
- Acceleration: From 0-60 mph in 20 secs with a full load.
- Charge time: Up to 70% of its range within 30 min.
- Average life expectancy: 1m miles, according to Musk.
- Enhanced Autopilot: The Semi has Autopilot which makes the driver’s job measurably easier and is a key selling feature.
- The wait for FSD: While the company did not announce any updates, FSD on the Semi which would be huge. Eventually, FSD in trucking will eliminate the need for a driver. This is likely 5 years away.
Semi industry quick facts:
- Average price of a semi in the US is $140K. *Tesla has not publicly updated its Semi pricing since 2017. At that time, the 300-mile range version was set to cost $150k and the 500-mile version $180k. We expect pricing today to be closer to $180k and $210k, respectively. In other words, the Tesla Semi could be priced about 30% higher than its gas-powered competition.
- US forecasted sales in 2022: Around 225k in 2022, which compares to an expected 14m passenger cars.
- Estimated number of Class 8 semis on the road: 7.6 million.
- Average life expectancy: 10-15 years of use.
- Average miles per day: Long haul truckers can legally drive up to 11 hrs, or about 700 miles per day. The average is closer to 475 miles per day which factors in loading and unloading time. When drivers are on the open road, the average is likely 650 miles, which means the 500m range of the Tesla Semi may not be enough for many drivers until the high speed charging network is fully built out.
- Annual fuel and maintenance: Estimated to be $110K which includes fuel ($82k), insurance, taxes, tolls, licensing, permits, tires and maintenance.
The current market leaders:
