Elon Musk via Twitter
Tesla unveiled its vision for a 21st-century semi in November, an electric Class-8 truck due in as little as two years that CEO Elon Musk says is safer, sleeker and more efficient than anything on the road today. Hitting his bold targets for the vehicle’s range, cost and durability won’t be easy.
When two sleek Tesla Semis sped across an airport tarmac next to the SpaceX rocket factory in Los Angeles in November, Elon Musk rocked the heavy-duty vehicle market with a disruptive vision of the future. But as eager customers settle in for a two-year wait for the all-electric behemoth, a robust market for heavy-duty electric trucks and buses is already taking shape.
Tesla quickly racked up about 400 truck reservations from big haulers like UPS and Anheuser-Busch through December. But as those deposits arrive, fast-growing startup Proterra, packed with ex-Tesla employees, got an order for 25 battery buses from the Los Angeles Department of Transportation in December, each priced at about $700,000, as the agency converts a 359-vehicle fleet to electric. That complements the Los Angeles County Metropolitan Transportation Authority’s recent $138 million order for electric buses from New Flyer and China-based BYD as it too replaces thousands of natural gas vehicles.
“Bus transit, because of the defined route, the limited daily mileage, the number of miles driven per year, all of that makes it a perfect application for battery electric which is why that market is going to go 100% electric faster than any of the other transportation sectors out there,” Matt Horton, Proterra’s chief commercial officer told Forbes. The private California company is approaching 500 sales and recently added a Los Angeles factory to supply West Coast customers.
Electric buses able to travel up to 200 miles a day in city driving already account for about 10% of U.S. transit agency orders in 2017, and rivals Proterra and BYD expect those sales to keep growing as the performance of their vehicles improves and operating costs stay well below that of diesel and CNG models. Even with Musk’s prodigious marketing talents, battery-electric semi-trucks will take longer to catch on, assuming that Tesla’s Semi actually launches on schedule in 2019 or 2020.
“Long-haul trucking is the most challenging duty cycle for a battery-electric vehicle to perform, given the long distances required at freeway speeds with a heavy payload in tow,” Horton said.
Proterra opened a Los Angeles-area bus factory in July to supply transit agencies west of the Mississippi.
Pressure to cut climate-altering carbon emissions in California, Europe and China has accelerated demand from cities, transit agencies and cargo handlers and shippers for cleaner vehicles, and companies are responding with lower-emission diesel systems, plug-in hybrid trucks and fully electric powertrains – including some that get electricity from hydrogen rather than batteries. Along with buses, the new players are finding customers ready to deploy heavy-duty battery vehicles in specific types of applications.
Tesla’s eye-catching design and claimed range of up to 500 miles per charge was even better than the 300 miles that was expected, as is its claim that the semi will produce fuel savings of $200,000 or more and a “two-year payback” period. That explains why UPS, Pepsico, Sysco and Anheuser-Busch, which put down up to $20,000 in refundable deposits per truck, want to be among its first buyers.
Musk’s expected base prices of $150,000 for 300-mile range trucks and $180,000 for 500-mile semis, combined with their lower operating costs per mile versus diesel trucks, makes them even more attractive to companies with vast fleets.
There’s also public relations value in committing to buying what could be the most disruptive and environmentally friendly heavy-duty truck ever developed.
Yet despite an exciting premise, a number of big questions about the Tesla Semi haven’t been answered. Among them:
Those answers, along with Tesla’s plans for an electric pickup Musk is also promising in the next few years, will come in time.
Elon Musk via TwitterOther players in the electric truck space aren’t waiting around for them, particularly as California is providing incentives worth $398 million to support purchases of clean trucks and buses in the state.
BYD, partly owned by Warren Buffett’s Berkshire Hathaway, has started shipping its own electric Class-8 trucks, priced from about $200,00, to haul heavy cargo offloaded at ports. The company’s U.S. unit is also ramping up production of electric sanitation and delivery trucks, as well as buses, at a new in Lancaster, California, that factory that opened late this year in anticipation of growing demand.
A BYD electric sanitation on display at the company’s Lancaster, California, factory.
Among traditional industry players, top diesel and natural gas engine maker Cummins has a Class 7 cab equipped with a 140-kilowatt-hour battery pack that hauls a 22-ton trailer it will sell to bus and commercial truck operators in 2019.
Daimler is shipping its Fuso eCanter electric delivery vans to global customers, and October unveiled a concept Class-8 truck that goes over 200 miles per charge, the E-Fuso Vision One. That truck will compete directly with the Tesla Semi when it arrives in two to three years.
Truckmaker Volvo, which also owns the Mack brand, isn’t yet committing to a battery-powered Class 8, though it’s working on hybrid and plug-in hybrid systems, as well as cleaner, more efficient diesel engines.
Battery power for trucks “is moving in the right direction and we’re testing to see where it fits, particularly in certain locales that are short range,” Keith Brandis, vice president of product planning for Volvo Trucks North America, told Forbes.
“It may come into medium-duty trucks and in medium heavy-duty trucks before it works its way into longer haul,” he said. “To say today that we’re ready for long-haul operations of 10, 11 hours a day, that the weight and the cost that’s needed for charging, all of those things … well, we’re still studying.”
Trucking company Ryder, which is reserving an unknown number of Tesla Semis, also recently partnered with Chanje, the U.S. unit of a Chinese firm that’s selling medium-duty electric delivery trucks that can haul 6,000-pound payloads and travel 100 miles before being recharged.
Thor Trucks, a small Los Angeles startup with its own cutting-edge semi design, is also testing a prototype Class 8 semi-truck in recent months, built using a Navistar frame. Thor’s target is up to 300 miles of range per charge with a $150,000 base price. But unlike Tesla, it wants to build it in partnership with existing truckmakers.
“A lot of people in this space have tried to vertically integrate, whether because they haven’t had the ability to have conversations with suppliers or the challenges around volume,” Thor co-founder and CEO Dakota Semler told Forbes.
The Thor ET-One Class 8 electric semi-truck cab is designed to haul up to 60,000 pounds and have maximum range per charge of 300 miles.
“We feel the only way for us to succeed is through partnerships. This industry is incredibly capital intensive and there’s not much you can do to get around that factor except by partnering with people who are not only well-capitalized and well-funded, but very experienced.”
That approach makes sense for a 17-person startup like Thor, and it’s counter to Tesla’s style of keeping virtually all aspects of vehicle development and production in-house and proprietary.
After a near-death experience in 2008, Tesla became the global standard among auto brands for electric cars, perhaps to a greater extent than Musk originally thought possible. Now he’s intent on replicating that in the heavy-duty truck market.
Those 400 or so reservations are a good start, and the company’s clean-sheet styling is refreshing. But Tesla will only have a big impact if its Semi goes into production more or less on time and arrives with the range, design, safety and eye-popping performance and speed promised.
Right now that looks like a really heavy load.