The Tesla Semi has the potential to make serious waves and dominate the trucking industry after the dust settles from the global pandemic. Currently, the segment is populated by veterans such as Daimler and its Freightliner brand--which accounts for about 1 in 3 heavy-duty trucks sold in the United States. Yet despite these challenges, the Tesla Semi has five key advantages and one overlooked trump card that will allow it to perform very well in the long-haul market.
The global pandemic has not been kind to the auto industry as a whole, and it has been especially brutal to the long-haul trucking market. As noted in a Freight Waves report, orders of new trailers plummeted 55% in March, primarily due to the effects of the virus. Amidst such drastic effects from the virus, there is a good chance that the long-haul market will see some changes once the pandemic is over. Among these may be the expedited emergence of electric trucks, which are not dependent on oil and are friendlier to the environment.
The electric vehicle disruption has not really started in the trucking industry. However, industry leaders like Freightliner have already begun their own battery-electric semi program. Freightliner has the eCascadia, a Class 8 truck which could rival Tesla Semi's long range variant. This means that if Tesla does release the Semi sometime later this year, it would likely set the stage for a battle that would determine the leader in the next-generation of trucking. The two biggest players competing for the prize could be Tesla and Daimler's Freightliner brand--currently the king of the trucking industry.
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Daimler Trucks North American CEO Roger Nielsen noted in the past that his company has a significant advantage in the emerging electric long hauling era. For Nielsen, Daimler's biggest strength will be its experience, which was honed by decades of truck-making. "We have decades of experience in successfully producing durable commercial vehicles in high volumes that stand up to the demands our customers place on them. We now bring this unmatched experience and expertise to the electric truck category," he said.
While this is true, the DTNA executive may be neglecting to consider that the stakes are different in the electric truck market. If there's anything proven by the long line of failed "Tesla Killers" that have been hyped in the past, it is the fact that those who mastered the internal combustion engine might not necessarily be masters of the electric motor. Building and designing electric vehicles with industry-leading electric motors and batteries require experience, and in this light, Tesla happens to be the most experienced automaker around.
The fight for tomorrow's trucking market will likely involve technologies that are a bit foreign to companies like Daimler and its Freightliner brand. These technologies are things that Tesla actually has extensive experience in, thanks to its work, starting in 2008 with Roadster up to its current Model Y EV. Below are Tesla's key advantages.
Next-generation vehicles are expected to feature autonomous capabilities. Even if the trucks themselves are not fully-autonomous due to limitations in regulations, next-gen trucks are primarily expected to offer advanced driver-assist software. This plays right into Tesla's strengths. Take the Semi, for example. The vehicle is equipped with a dedicated "Convoy Mode" that allows multiple trucks to be led by a lead, crewed vehicle. The feature may not be a full-blown full self-driving system per se, but it definitely makes transporting large amounts of goods easier. Such a benefit will not be neglected by business owners, many of whom spend a large portion of their budget on transportation costs.
Tesla is working towards Level 5 autonomy, which will allow its vehicles to navigate without a driver. Full autonomy would answer the decreasing number of drivers in the trucking industry. There aren't that many people who are applying to be truck drivers today. The conditions truck drivers have undergone during the pandemic aren't exactly encouraging people to apply either.
Tesla's batteries are industry-leading, with auto experts such as Sandy Munro stating that they are the best in the field. Tesla's battery technology is advanced enough that its flagship vehicles, the Model S sedan and Model X SUV, can draw out far more range than a rival vehicle--such as the Audi e-tron--from a battery pack, almost similar in size. There is little doubt that Tesla stands today as one of the world's premier battery makers, and the company will be bringing all this expertise into the Semi. Batteries could ultimately make a difference for the all-electric long-hauler, as characteristics of its pack, such as cell density, will likely have a direct impact on the Semi's capabilities and price.
Tesla's Supercharger Network may be second to none, and the planned Megacharger System for the Semi will likely follow the same ramp. Tesla's proprietary charging system provides rapid charging services that are affordable for vehicle owners. The price of charging could be extremely valuable for the Semi, since fleet owners will most definitely prefer to recharge their vehicles at the lowest cost possible. Fast-charging technologies for the Semi were hinted by Elon Musk during the vehicle's unveiling. The Tesla CEO teased short, 30-minute charging sessions for the Class 8 truck, which would add about 400 miles of range.
Tesla is a young company, but it has a lot of experience in mass producing electric vehicles. With the Model 3 and Model Y, Tesla is attempting to breach the mass-market, which requires a production rate that matches the veterans in the auto market. This experience in mass producing electric vehicles will likely be utilized by Tesla for the Semi, as hinted at by the all-electric truck's Model 3 components. The vehicle, for example, features four Model 3-derived motors. Its door handles and twin infotainment displays are also derived from the Model 3. This will likely allow Tesla to ramp the Semi's production in a rapid manner, since it will be dealing with parts that have already been in use for years.
At the end of the day, one of Tesla's biggest strengths is its business model, which eliminates the middle man and allows customers to directly purchase their electric vehicles from the company itself. This would likely be invaluable for buyers of the Semi, particularly as the vehicle will see a lot of use and abuse on the road. By having a straight line to Tesla, owners of the Semi will be able to address their concerns to the electric car maker directly. The pricing on the vehicles' parts during their infrequent maintenance will also be fair, as everything will be sourced from Tesla.
Beyond all of its advantages, the Tesla Semi has one key trump card against competitors such as Freightliner. Tesla's President of Automotive today is Jerome Guillen, a man who has spent the better part of the decade being the electric car maker's resident problem solver. But before he was employed at Tesla, Guillen served as the General Manager of New Product Development in Freightliner LLC. During his stay in Daimler's trucking division, the Tesla President actually oversaw the development of a new generation of Class 8 trucks. Guillen's experience in Daimler could be priceless for Tesla, especially since the Semi is his personal project. With this in mind, the Tesla Semi may very well be Tesla's most unexpectedly disruptive vehicle yet, since its creator is a veteran of the trucking industry.
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