Thus it would be quite reasonable to assume that cost savings plus generous incentives will suddenly make demand result in, dare I say it, exponential growth.
Is all that not why Tesla suddenly announced Semi deliveries would begin this year?
Always good to have your insight.
The 10% number I threw out was admittedly a wild guess and seems absurdly conservative to me. Thinking about the value the semi platform will deliver, I expect that sales will only be limited by the ability of Tesla to scale cells as early estimates guess this to be a HUGE number of cells. 500 miles of range with an efficiency of 2kWh/mile is 1000 kWh or 1 mWh of cells. Wow.
Let's take a look at the value proposition for a moment. Costs vary widely for electricity across the country as well as during the time of day and necessary charge rate. Also diesel fuel pricing is anything but stable. Still, we can make some guesses and get a general idea as to the savings with an electric drive train.
Current diesel price per gallon:
$5.13
Miles per gallon average:
The current fuel consumption for a loaded big rig is about 6 mpg. (my trucker friends tell me that 6 mpg is "if you are lucky).
Cost per mile for fuel: $0.85
Average miles driven per year:
80,000 to 110,000 (let's assume 100,000 miles per year for easy math)
Yearly cost for fuel: $85,500
Current list price: $200,000 -2023 Freightliner Cascadia
Monthy payment assuming 10% down, 60 month loan at 4.5%: $3,355.
Yearly payments: $40,260
Cost per year payments plus fuel: $125,760
For this exercise, I'm going to ignore what is certainly a benefit for an electric vehicle, and that is maintenance costs. While we've seen some numbers that suggest EVs have a 22% lower cost of maintenance, we have no data on the semis at this point so while I expect brakes, rear end, exhaust (and DEF system), transmission, clutch, motor, and other systems will cost much less, we won't know until these vehicles are out in the wild for some time. Also, I'm guessing insurance will be similarly priced, assuming similar down-time, and mileage. These may be worse for the Tesla early on due to charging infrastructure issues, so I'm going to assume an offset for this post.
Tesla semi:
While we don't have clarity to the current pricing, we do have a long history of Tesla maximizing the tax credit system. Tesla will likely charge the maximum they can and the way the current tax credit is structured, I see that as $240,000. This is $60,000 more than the reveal price and some might balk at that, but if the Cascadia is $200,000 the tax credit can be at the only taken as the *difference* between the electric truck and a similar diesel truck. I'll use this higher price for this exercise. Since I am looking at yearly cost, I'll also ignore depreciation.
The $40,000 tax credit brings the cost of Tesla semi to price parity with the Cascadia so the yearly payments are the same: $40,260.
Cost of electricity: $0.14/kWh.
Tesla promised $0.07/kWh when they unveiled the semi and roadster, but that was many years ago. They also said it would be powered by solar, but that is going to demand a mind boggling amount of solar, so a huge amount of CAPEX. In my area, I can get commercial/industrial energy charges of $0.03-0.04/kWh in off-peak charging, so it is possible for Tesla to hit their 7cent number, but I'd be surprised. I doubled the number to be conservative and assume all megacharging.
Cost of energy: I'm going to assume 10% system losses for charge/discharge cycling, cabin use, etc. so for 100,000 miles, the Tesla semi would use 220,000 kWh at a cost of $0.14: $30,800 for energy per year.
Tesla Semi one year cost payments plus energy: $71,060
Difference: Tesla is
$54,700 cheaper to operate per year.
Or: Cost per mile for diesel: $1.25 vs Tesla: $0.71
At a tax preferred $200,000 initial price. The savings will completely pay for the new truck before the 5 year loan matures **AND** will have 600,000 miles of drivetrain warranty remaining.
This is assuming no autonomy, not even follow-the-leader style caravan where the real savings (labor) come into play, is ignoring the savings from maintenance and repairs, and also assumes no difference in downtime or insurance, both of which are likely to favor the EV platform due to the fundamentals of how Teslas are designed and built.
TLDR: Tesla Semi will sell every unit they can produce for a decade or more and destroy the diesel fleet in the process.