Will the Tesla Semi be profitable?

[flyhigh]

I did some quick math comparing the semi to the Model 3 Performance.

Model 3 performance is selling for $62,990 with an 82 kWh pack.

Tesla Semi is selling for roughly $180,000. Based on the posted 2 miles per kWh efficiency, it would need a 1,000 kWh pack for the 500 mile version.

In order for the profit per kwh to match the model 3 performance they would need to sell them for $767,000! I know that battery costs are only one factor in the overall costs of vehicle production but it’s still significant.

Any thoughts on this?

Thanks!

 

[GSP]

Tesla said $180k for the 500 mile model in 2017. Now the IRA cuts the buyers tax bill by $40k for each BEV commercial truck, so I expect Tesla's pricing to be at least $220k. With inflation as an excuse, Tesla might be pricing their semi at $250k

They also said consumption would be less than 2.0 kWh/mile, not equal. I expect the battery to be 800-900 kWh total capacity. One way to look at this is that Tesla's price would be $250,000 / 850 kWh = $294/kWh for the complete vehicle. To be profitable, Tesla's COGS would have to be extremely low.

GSP

 

[MC3OZ]

In order for the profit per kwh to match the model 3 performance they would need to sell them for $767,000!

I don't think profit per kWh is the right way to look at it.

Profit per vehicle is..

The Semi has been delayed a few times because the battery cells could make more profit building say 12 Model 3/Ys.

The profit from a single semi sale will never match the profit from 12 Model 3/Ys, but the main thing is it makes a profit.

My guess is that the profit on a Semi might be the same as the profit on 2 Model 3/Ys, the effort to make the sale and the time to make the vehicle probably even out. At present building a Semi takes much longer than a 3/Y, even when the line is more automated, it probably still takes twice as long.

Considering capex, R&D, the need to build Megachargers etc, Semi will not make a major contribution to profits, It does help sell some solar, batteries and charging equipment to customers.

Overall it is important from a mission point of view, and for internal Tesla use. But the delays in building it so far are understandable, when the cells can make more money in other vehicles.

 

[Doggydogworld]

The Semi has been delayed a few times because the battery cells could make more profit building say 12 Model 3/Ys.

But this was obvious in 2017. I said at the time Semi required extremely cheap high cycle life cells, which Tesla did not have and were not likely to appear in anything like their projected time line.

They can keep the hype going by selling handfuls at 300k each to recipients of massive government grants, though.

 

[MC3OZ]

But this was obvious in 2017. I said at the time Semi required extremely cheap high cycle life cells, which Tesla did not have and were not likely to appear in anything like their projected time line.

They can keep the hype going by selling handfuls at 300k each to recipients of massive government grants, though.

It all depends on 4680 production.

The need to sufficient 4680 production to move most of 3/Y to 4680 freeing up 2170 cells for Semis.

Then Sparks needs to make additional 4680s for Semis.

This requires significant up front investment in additional cell production, they need 4680 production to go close to hitting the capex targets outlined on battery day.

This is why they haven't rushed to volume production, and why cell production is part of the Sparks expansion.

The initial timeline outlined at the Semi reveal wasn't realistic, we don't know why that was so wrong. Perhaps 4680s were already planned and the expected more progress?

 

[Doggydogworld]

It all depends on 4680 production.

The need to sufficient 4680 production to move most of 3/Y to 4680 freeing up 2170 cells for Semis.

Then Sparks needs to make additional 4680s for Semis.

This requires significant up front investment in additional cell production, they need 4680 production to go close to hitting the capex targets outlined on battery day.

This is why they haven't rushed to volume production, and why cell production is part of the Sparks expansion.

The initial timeline outlined at the Semi reveal wasn't realistic, we don't know why that was so wrong. Perhaps 4680s were already planned and the expected more progress?

Biden throwing 40k+ of taxpayer cash at every Semi pack will certainly help. But I still say cars will outbid Semis for kWhs, no matter how many cells Tesla builds.

 

[jeewee3000]

Biden throwing 40k+ of taxpayer cash at every Semi pack will certainly help. But I still say cars will outbid Semis for kWhs, no matter how many cells Tesla builds.

As @MC3OZ said, it all depends on the batteries. As Drew Baglino outlined in the Q1 2023 conference call, 4680's development is chugging along according to what they outlined on Battery Day but even more stuff is happening.

They are going for a "2nd generation" more manufacturable 4680 cell (i.e. scalable, i.e. cheaper when scaled). Also they are gaining experience in the structural battery pack architecture.

I can't imagine not using the structural battery pack for Semi. Even if they don't do it already (I have no info on this, actually) they will eventually. The bigger the battery pack, the larger the benefit from switching to a structural pack will be. More weight savings, therefore more range/better efficiency.

I think Tesla knew when the Semi was revealed that it would take a long time before they could scale it, but IMO it's a crucial product for the Tesla Brand and the mission. Without the Semi the public can question if a full transition to BEV's is even possible (remember Bill Gates' stance on this). Now that the Semi is driving around for Tesla and Pepsi, people know it's possible and it's coming. Also it allows other OEMs to step in and work on their own electric vans/semi's.

Therefore, profitability of the Semi is not very important right now. Wlll it be profitable in the future? I believe so, yes. But 'till then we need a trickle of Semi production to keep the mission strong.

(This in contrast to Roadster 2. It'll be great when we see it, but it's not a priority whatsoever and most of us will never see one in real life. That's just a halo product to show EV's can be superior in every way.)