Tesla faces long haul in rolling out electric big-rigs

Keith Laing
Detroit News Washington Bureau

Tesla Inc. faces an uncertain road ahead as it moves aggressively to enter the crowded U.S. trucking market.

Tesla made a big splash Thursday night with its unveiling of an electric big-rig truck for 2019 that includes semi-autonomous driving features. During a boisterous rally in Los Angeles on Thursday, the Silicon Valley-based company also unveiled a new four-seater electric Roadster that CEO Musk said will accelerate from zero to 60 miles per hour in 1.9 seconds and top out at more than 250 miles per hour.

But auto industry experts questioned whether Tesla would be able to deliver the new vehicles given its problems getting the new mid-priced Model 3 off the production line. And they say operators of semi-truck fleets will not be so easily wowed by the prospect of an electric big-rig truck and that it will need to make business sense.

Musk said that his company’s electric trucks will have a 500-mile driving range at maximum weight and highway speed, and they will be capable of going from zero to 60 miles per hour in 5 seconds – or 20 seconds if they are carrying an 80,000-pound load.

A Tesla truck will be 20 percent less expensive than a diesel truck over the life of the vehicle, and they will be capable of operating in convoys, Musk said.

“It blows my mind,” he said to cheers. “I think it will blow yours.”

The pitch was enough to convince Michigan-based Meijer to put $5,000 down-payments on four trucks. The grocer and discount retailer wants to test whether the company could save money and reduce emissions. And Walmart told CNBC that it will test the new vehicle.

Rebecca Lindland, executive analyst at Kelley Blue Book, is skeptical.

“The Tesla Roadster is absolutely fabulous and Elon Musk’s ambition is admirable. But as a Model 3 depositor looking at an 18-month wait, I do wish he was a little bit further along in the delivery process before embarking on yet another new vehicle, let alone a semi-truck,” Lindland said.

She believes potential customers for the truck are likely to be much less patient about production delays than fans of its sporty passengers cars.

“The biggest challenge Tesla faces with its semi is customers,” she said. “These are business people, not fans, and they will need convinced that this truck is better for their balance sheet than existing technology. It probably is, based on the specs provided, but this isn’t necessarily a slam dunk.”

The release of the new vehicle prototypes comes two weeks after Tesla reported its biggest-ever quarterly loss as the company delayed by months a production goal for its critical Model 3 sedan.

It was then that the Palo Alto-based automaker pushed back its 5,000-per-week production goal for the car — from the end of this year, to late in the first quarter of 2018. The Model 3, with a starting sticker price of about $35,000, has been plagued by production problems. The main bottleneck is at Tesla battery plant in Nevada, known as the Gigafactory. Tesla also reportedly is encountering problems with welding and assembly at its Fremont, California production facility.

Tesla sold just 222 Model 3s from July through September.

But problems with the Model 3 were far from the minds of attendees at Tesla’s pep rally Thursday. During the rally, Musk compared the experience of driving the big rig to the feeling of being behind the wheel of one of his company’s other electric vehicles that feature its semi-autonomous Autopilot feature.

“It’s as though you’re driving a Model S or a Model X or a Model 3,” he said. “It’s just big. It’s super-easy to drive.”

Musk said Autopilot will come standard on its electric trucks.

“The truck will automatically brake,” he said. “It will actually automatically lane-keep as well. Even if you’re in the truck and you have a medical emergency, the truck will actually stay in the lane and gradually come to a halt ... This is a massive increase in safety.”

Musk said Tesla will guarantee the big rigs will not break down for a million miles because they have will have multiple motors. “You can lose two of the four motors and the truck will still keep going,” he said.

Karl Brauer, executive publisher of Kelley Blue Book and Autotrader, said the challenge for Tesla now will be keeping its promises, especially when it comes to potential truck buyers.

“The specs on the new semi-truck and sports car would put both vehicles at the top of their segments... assuming they can be produced and sold as part of a sustainable business plan,” he said. “So far, that final element has eluded Tesla Motors, which makes it difficult to see these vehicles as more than ‘what if’ concept cars.”

The introduction of the truck comes as lawmakers in Congress debate whether self-driving trucks should be included in legislation that would legalize driverless passenger cars.

Michelle Krebs, executive analyst for Autotrader, said the trucking industry presents a large opportunity for Tesla, although she noted there are already other semi-autonomous truck manufacturers, including Daimler and Uber’s Otto.

“The truck market, for a variety of reasons, is ripe for change, from electrification, self-driving and connected,” she said. “Tesla clearly sees the promise. However, Tesla will be up against some formidable challengers, Daimler being one which knows this market well and already has customer trust and loyalty.

Krebs added: “In contrast to Tesla’s current buyer bases, the priority for truck drivers and fleet operators is reliability and up-time. The truck is a tool for making money. When a truck is out of commission, money is lost. In contrast, a Tesla car owner has other vehicles in the household fleet to drive if the vehicle isn’t operational.”

Michael Harley, group managing editor for Autotrader and Kelley Blue Book, questioned Tesla’s strategy.

“While Tesla’s truck announcement will unquestionably create a lot of buzz, the company has incorrectly aimed its sights,” he said. “Diesel fuel is readily available and relatively efficient for heavy long-haul trucks that cruise open highways at a fixed speed. A more appropriate target for the electric-vehicle maker would be the short-haul, or so-called last-mile delivery, which would benefit from regenerative braking, low noise and emission-free EV motoring.”


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Twitter: @Keith_Laing