The more I analyze the Tesla semi, the more I wonder why is Tesla doing this??
Follow me.....
- US annual semi market ~220K
- At prices announced Tesla makes $200/kWh per sale
- Tesla makes $560/kWh on the M3
- Tesla makes over $1,000/kWh on the typical MS/MX
- Takes about 10x the quantity of batteries to make 1 semi sale
- Takes 4x the quantity of motors to make 1 semi sale
- All 4 of those motors are warrantied for 1M miles instead of 120K
- Tesla will need to make significant CAPEX for creating whole new megacharger infrastructure
What is the appeal to spend tons of additional CAPEX, to support building vehicles that require 10x more batteries, 4x more motors, more warranty liability and bring in far less margin for a potential market that is smaller than your backordered M3?? I don't get it, what am I missing?
Here are a few high level thoughts on why the Tesla Semi is worthwhile.
The worldwide large truck market is in the range of 2-3M vehicles (this includes non-Semis). For comparison purposes, the market leader Daimler sold 500K large trucks in 2015 and 415K in 2016, with revenue of 37B Euro in 2015 and 33B Euro in 2016.
The addressable truck market for Tesla is actually significantly larger because in addition to selling the Semi it is displacing diesel (which is roughly triple the cost of the Semi in the US) with charging from batteries and electricity. So Tesla can charge more for the truck to recoup the cost of batteries, and also generate additional revenue from selling electricity through Megachargers etc.
There is no question that Tesla intends to expand beyond the US. In his recent talk posted elsewhere on TMC, Jerome Guillen discusses modifying the Semi design for European roads soon after the US introduction. I can't see a reason why Tesla would not eventually market the Semi worldwide, with variations to meet the needs and regulatory requirements of different parts of the world.
Also, the "Pickup that any carry a Pickup" already signals that once Tesla is in the truck business, it can modify the Semi platform for other trucking uses. It can also develop other trucks to address other parts of the market.
In addition to targeting a large market, Tesla is in a unique position to make very quick inroads into the market. Tesla can use its advantages in low cost battery production, experience developing a charging network, and access to solar power and storage to quickly undercut diesel and take a large share of the Semi market, as soon as it is able to ramp production.
In addition to the very large financial opportunity, as
@baillies notes, Semis use an enormous amount of diesel per vehicle because of low mileage and large number of vehicle miles per year. So developing a Semi promotes Tesla's mission of accelerating the world's transition to sustainable energy.
Finally, having street cred in the big truck market may also help Tesla sell Pickups when the time comes.
