Jul 5, 2017

Will Tesla Disrupt Long Haul Trucking?

Tesla (NASDAQ:TSLA) tells us that come September, it will unveil a powerful, long-range, all-electric semi truck.

Tesla isn't talking about a short range, specialty truck for delivering feathery light croissantes from the bakery to some Silicon Valley Sunday brunch. This Tesla truck is supposed to haul heavy line-haul freight over long distances, across mountain ranges from one end of America to the other. Tesla's electric truck will supposedly compete with the best diesel rigs on the basis of cost in an industry that looks at cost down to fractions of a cent per mile.

Trucking is a highly competitive industry, driven almost entirely by cost, cost, and cost. Even the coffee truckers drink ($0.004/mile) is a consideration. Tesla has sold a lot of electric cars on the basis of high performance and 'bling', but can Tesla engineers sharpen their pencils, put on their green eye shades, and compete on cost? If Tesla can build a world-beating semi-truck that also delivers lower overall per mile cost, it might disrupt another industry. And, that is something investors should care about.

There is just one thing. Everyone in the industry "knows" that a realistic battery - electric truck isn't possible. Batteries weigh too much. Batteries cost too much. Batteries take too long to recharge. While it might be possible to make a fuel cell - electric truck that could be refueled with hydrogen, or a diesel truck that uses liquefied natural gas, there is absolutely no way ever, ever that a battery truck can do this job.


Seeking Alpha

by Randy Carlson