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 The Trucking Industry Welcomes Tesla…. And Billions in Revenue?


April 21, 2017


A high-tech Tesla semi-truck, just by taking a small step could accumulate billions in revenue towards the country’s trucking industry.

 

While the Model 3 ins still in the works, the entry of Tesla into the electric autonomous semi-truck market is not surprising and actually makes sense.

 

The automaker’s anticipated entry into semis could also be a boon for trucking companies. It is estimated that an autonomous electric version could save them 60 percent to 70 percent over conventional trucks, due to lower fuel, maintenance and insurance costs. If Tesla were to lease batteries at 25 cents per mile, it would cut costs for truckers in half.

 

It would, of course, require a significant investment.  Tesla would have to spend about $1.7 billion  upfront to supply both the trucks and the battery swap infrastructure.

 

So, why else would Tesla go into the Trucking market?

 

It believes it can sell a lot of trucks:

If Tesla were to collect 10 percent of the new truck market in the U.S., it would be worth $2.5 billion in annual revenue or as many as 70,000 base Model 3s.

 

It may be about services:

Trucking could allow Tesla to enter the services market, bringing sustained revenues. Tesla could conceivably sell a truck without a battery (thereby significantly lowering the upfront cost) and offer battery swapping as an alternative to putting a large battery in the truck.

 

It won’t cost a lot to dive in:

Entering the trucking industry may not be particularly challenging, they said.

A production rate of just 25,000 trucks annually would give Tesla 10 percent of new big rig sales, but would fit into its existing vehicle and battery factory without too much incremental investment.

One cost would be the build out of a network of 1,500 battery swapping stations along U.S. highways. It would be separate from the passenger car charging network Tesla already has. The analysts estimate that Tesla would spend $1.7 billion to enter the heavy-duty truck segment, including the swapping stations.

Such a business might add about $5 billion to Tesla’s $50 billion stock market valuation, according to the Morgan Stanly analysts.

 

What does this mean for the Trucking industry?

It can be a game changer for the trucking industry.

They estimated that an autonomous, electric truck could be 60 to 70 percent less expensive to operate compared with a human-driven diesel big rig. The cost savings come from drivers, fuel, maintenance and insurance.

 

 

How do you feel about this new entrant? What does this ultimately mean for truckers?

 

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