“A Tesla semi-truck is coming.”
That’s how Morgan Stanley autos and shared mobility analyst Adam Jonas kicked off a research note published on Thursday.
Tesla has promised to unveil the semi-truck in September. which if we’ve read Elon Musk’s Master Plan, Part Deux correctly will be all-electric and somewhat self-driving —
“With the imminent launch of the Model 3, launch of the gigafactory, development of the Model Y and integration of SolarCity, why does Tesla care about trucking?” Jonas asked.
Good question. I think the semi is indeed a massive and unnecessary distraction. My pet theory is that some Tesla engineers have been working on it, showed Musk their work, and he went bonkers, having a sort of Optimus Prime moment when he saw a great big freakin’ Tesla truck! Semis have this effective on grown men — just look at these photos of President Donald Trump behind the wheel of a big rig.
Jonas laid out a fairly compelling case for the Tesla semi in his note.
“We believe the Tesla truck opportunity is real and is a natural market adjacency to the personal transport model, but we don’t see it being worth more than 10% of market cap,” he wrote adding that:
We believe an autonomous, electric truck can be a game changer for trucking carriers … by significantly lowering operating costs, improving productivity and even driving industry consolidation … We estimate an autonomous, electric truck could be 60-70% cheaper to operate than a regular truck today due to lower driver, fuel, maintenance, and insurance costs.
Then Jonas brought out some tantalising insight:
In our conversations with trucking carriers, we believe they would be quite open to using such trucks made by new, non-incumbent OEMs as long as the performance, service and operating costs are superior. In fact, we would not be surprised if Tesla revealed large carrier and shipper partners during its truck reveal in September.
All fair enough, at a highly speculative level. But let us now remind ourselves that even if the Tesla semi uses a battery swapping framework, as Jonas suggests it would (thus lowering the purchase or leasing cost), it would still demand the acquisition of an all-new manufacturing capability for the carmaker.
Jonas thinks Tesla can swing it, but remember that Tesla has thus far shown itself to be very good at creating a growth story — hence it’s soaring, $US50-billionish market cap, bigger than Ford’s and on par with GM’s — and very bad at actually building vehicles. It still hasn’t cracked the 100,000-per-year mark, while Ford and GM assemble that many examples of a single pickup model in a single month.
At this point, with Tesla needing to build and sell nearly a million vehicles annually to even come close to justifying its huge market cap, the semi seems like a cool idea that would interfere with its more mission-critical goal of producing 500,000 Model 3 vehicles by the end of 2018 or the middle of 2019.
Jonas is right that the freight space is ripe for a rethink. But maybe Tesla is the wrong player to be taking on that challenge.
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