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Jon LeSage

Jon LeSage

Jon LeSage is a California-based journalist covering clean vehicles, alternative energy, and economic and regulatory trends shaping the automotive, transportation, and mobility sectors.

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Is Tesla’s E-Truck A Game Changer For Energy Markets?

Trucks

Automotive and financial market analysts wonder what Tesla CEO Elon Musk could possibly be thinking.

Tesla is facing a real crossroads in its future as it runs behind schedule for the affordable, 220 mile range Tesla Model 3 reaching mass market. Why would the company also commit to entering a drastically different market with its Tesla Semi commercial truck launch?

There is some real market demand for it, Musk said, with truckers and fleet operators exploring their options for achieving fuel cost savings and cutting other operating expenses.

There's also steep demands being made by governments in the U.S., China, and Europe for trucks to reduce fuel consumption and greenhouse gas emissions.

Tesla revealed its electric semi-truck at a long-awaited Los Angeles unveiling on Thursday night. Musk bragged that the Tesla Semi will go 500 miles per charge, with 400 of those miles capable of being charged in 30 minutes. An even faster charge may be coming, too.

The heavy-duty truck will be able to go zero to 60 in five seconds, and can hit 60 mph in 20 seconds with an 80,000 pound payload.

Musk said that it will make a real difference in the commercial truck market with its cost savings and driver comfort features. It will also save truckers a lot in maintenance costs, with Musk expecting the trucks to not break down until they pass the one million mile mark. Tesla believes in that statement enough to offer a one million warranty against possible breakdowns.

Related: Is This The New Sweet Spot For Shale?

The Tesla chief also said that the semi-truck will be able to work in a three-truck convoy, reducing its cost per mile for the fleet down to $0.85 per mile, versus diesel being at about $1.25 per mile. The Tesla Semi will offer the onboard technology of "platooning," where two trucks can follow behind the leader in automated mode, benefiting from the aerodynamic force and fuel savings.

Electric trucks benefit from having fewer moving parts and no transmission of diesel after-treatment systems. Those gains make electric trucks less costly to maintain than diesel trucks, he said.

Factoring in total operating costs, with diesel trucks spending about $2.50 per gallon along with insurance, maintenance, and lease costs, the diesel truck costs owners about $1.51 per mile to operate versus about $1.26 a mile, Musk said. That assumes the Tesla Semi would be driven about 60 miles per hour with a full payload on a 100-mile route.

Musk said that truckers will be able to bring down and secure their energy cost at 7 cents per kilowatt by tapping into a Tesla megacharger. That solar-powered fast charger can supply about 400 miles of electricity in 30 minutes. Fueling up on diesel in a heavy-duty truck would take less time, but the typical 50-gallon fuel tank is going to take most of that time at the roadside fueling station.

Bloomberg estimates that electric trucks will cost operators about 12 cents a mile on maintenance. That compares to a trucking industry average of 19 cents for mile for diesel trucks, the financial data company reports.

Bloomberg said that an operator could be saving about $4,000 per year in maintenance and $14,000 in fuel when switching over from diesel to electric.

Musk didn't reveal pricing information on the Tesla Semi, but said that the total cost of operation will be very competitive with diesel trucks. Production of the Tesla Semi will begin in 2019, according to the chief executive.

The Tesla truck was revealed in a larger, long-haul version and a day cab without a sleeper. The idea here is that market demand is coming from short one-day trips with the smaller day cab, and that long-haul trips are always in demand -- especially as U.S. ports play an increasingly important role in the U.S. economy.

The average length-of-haul for truckers has dropped from about 800 miles 15 years ago to about 500 miles last year, according to the American Trucking Associations. That comes from port expansions nationwide and the e-commerce boom with companies like Amazon driving demand for shorter trips for faster delivery of consumer goods ordered online. Related: Is U.S. Energy Independence Realistic?

New customers are responding to the appeal. Walmart will be ordering 15 of the Tesla trucks, with five going to the U.S. and 10 to Canada. Loblaw, a Canadian grocery store chain, will be ordering 25 of these vehicles. The company's goal is to switch over its entire corporate fleet to EVs by 2030.

Walmart and Loblaw had followed a lead by U.S. trucking firm JB Hunt to order a number Tesla Semi trucks. Truck leasing and fleet management company Ryder Systems has announced it will also be purchasing Tesla Semis.

When it comes to electric work trucks, it won't just be about Tesla. Daimler, Cummins, and Bosch are taking electric commercial trucks very seriously in their product planning and development. Siemens has a pilot project in place testing the viability of electric trucks.

Medium-duty trucks and delivery vans are also seeing inroads from manufacturers responding to growing market demand. Startups such as Chanje, Nikola, and Wrightspeed are finding clientele, just like Tesla is doing.

By Jon LeSage for Oilprice.com

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  • AD on November 22 2017 said:
    Legally the gross weight of a semi truck cannot exceed 80K lb (https://www.michigan.gov/documents/Loads_dim_87014_7.pdf)! To claim the Tesla semi can carry a "payload" of 80K lb is mixing apples and oranges. Has it occurred to you why Tesla has refused to spec the size of the battery? It is because it will eat into this 80K lb max weight and the resulting max payload will easily be only a fraction of it! If it were indeed 80K lb payload, the size of the battery wouldn't matter to the customers if their truck is cheaper to operate. Assuming Tesla can achieve claimed 2KWH per mile, to run 500 miles on each charge would require a battery of 1 MWH! Model S' battery contains only 85 KWH at 1200 lb. Unless there is a revolutionary battery breakthrough between now and 2019, a 1 MWH battery would weigh 14K lb (Carnegie Mellon University is estimating a much higher number, https://www.forbes.com/sites/greatspeculations/2017/11/17/teslas-semi-looks-impressive-but-questions-remain/#73eec1401491). That leaves only 66K lb after battery. Now you subtract the weight of the empty truck itself, how much is still available for the payload?
    Further, this solar based mega-charging station is simply ludicrous. An average 39"x65" solar panel produces 250 KW. To produce 1 MWH would need 4000 panels charging for one hour! How many trucks is Tesla planning to charge per station per day? Lastly, is land free? 4000 panels would take 70K sq. feet to accommodate!
    Your entire article is basically an echo of Tesla's claims without any attempt to question if some of these numbers are even feasible or making any economic sense. Please note that there are NO independent 3rd party test to verify any of Tesla's figures!
  • AD on November 22 2017 said:
    Sorry for the typo in my previous post. I wrote, "An average 39"x65" solar panel produces 250 KW", but I meant 250 W. Thus, it remains correct that 4000 panels are needed to produce 1 MW.
  • EdBCN on November 22 2017 said:
    Everyone is focused on this Tesla announcement while in the real world BYD is already selling heavy trucks and buses, including long distance coaches. They have just announced their second north American truck factory. Garbage trucks seem to be a particularly apt use for the technology with their heavy loads and stop-and-go usage. As a matter of fact, my local garbage co just bought a BYD electric garbage truck.

    The reason Tesla, BYD, Daimler, Cummins and other are focusing on making EV trucks is that it has become obvious that electric drive-train makes much more economic sense for heavy and heavily used vehicles than for lightly used private passenger cars. Expect the truck and bus markets to grow explosively.
  • AD on November 22 2017 said:
    Since Tesla claims they can achieve 2 KWH per mile, that means to run 400 or 500 miles on one charge would take 800 KWH or 1 MWH respectively. An average 39"x65" solar panel only puts out 250 W. Thus, to produce 800 KWH would take 3200 panels if you do it in one hour. Since Musk claims this much energy can be charged in 30 minutes, then 6400 panels are needed! Given the dimension of each panel, 6400 panels would require an area of 113K sq. feet! This is just for one truck! Wow, I assume Tesla is entering real estate business as well.
  • Marcus Rönningås on November 23 2017 said:
    @EdBCN ; Spot on !!
    For some reason EV's have become similar to Tesla, which couldn't be further from the truth. Musk is great at marketing, and he has certainly put EV's on the agenda. Lets just hope that he's not all hat and no cattle.

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