“Unreal” Tesla Semi Set For October 26 Unveiling

The Tesla Semi reveal will be late. I know, I know. Tesla and Elon Musk are about to miss another self imposed deadline. Is anyone really surprised? The truth is, Musk gets more mileage out of missing deadlines — publicity wise — than most companies get by meeting them. That’s probably because Musk’s targets are always designed to “reach the unreachable stars” when others set their goals as low as possible.

The Tesla Semi, the Class 8 electric truck the company has been tweeting about for over a year, was supposed to be introduced to the public sometime in September. But Elon just tweeted that October 26 is now the scheduled date and even that is tentative. The reveal will take place in Hawthorne, California, where SpaceX has its headquarters. Musk describes the Tesla Semi in typically hyperbolic terms. It’s “unreal,” he modestly proclaims.

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Tesla Semi truck unveil & test ride tentatively scheduled for Oct 26th in Hawthorne. Worth seeing this beast in person. It's unreal.

7:20 PM - Sep 13, 2017

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What is unreal about it? Well, that’s part of Musk’s charm, isn’t it, to keep us on tenterhooks, salivating for more information? We know he said at the Tesla annual shareholders meeting earlier this year that the company has been working with its “biggest customers” on the design of the Semi, so they already know what it will be. “They want to know how many can they buy and how soon,” he said.

Then he added this tantalizer. He said he “really recommends” people come to the unveiling event if at all possible because “maybe there is a little more than we are saying here.” What does that mean? Your guess is as good as mine.

What we do know is that Morgan Stanley analysts Ravi Shanker and Adam Jonas believe the Tesla Semi will be the biggest disruptor of the trucking industry since the introduction of air brakes. Tesla hasn’t said anything about recharging their beast, but Shanker and Jonas suggest that battery swapping will be part of the package, with swapping stations costing about $500,000 each. The tractor is assumed to have a range of between 200 and 300 miles on a single battery charge.

Don’t clear your schedule for October 26 quite yet. Musk and Tesla have a habit of pushing things back, then pushing them back some more. But the excitement is building. Other companies are jumping into the electric truck swim. Cummins just announced it has developed its own electric powertrain for Class 7 short range trucks. BYD, WrightSpeed, and  Motiv Power also want in on the action.

Which is a good thing. Diesel emissions are a significant proportion of total emissions, including particulates, from the transportation sector. The sooner electric trucks go mainstream, the sooner we will all be able to breathe a little easier.

Source: CNBC

Tesla Semi “Biggest Catalyst In Trucking In Decades”

Elon Musk has said the reveal of the Tesla Semi will take place in September. Well, September is here. Where is this ground breaking, game changing electric truck he promised? Morgan Stanley analysts Ravi Shanker (no relation to the Bengali musician who taught George Harrison how to play the sitar) and Adam Jonas think they know the answer. “We believe the NACV show in Atlanta on September 25 could be a catalyst for the reveal,” the duo said on last Friday.

NACV stands for the National Association of Commercial Vehicles, which will present its annual assemblage of heavy duty rolling stock at the end of this month. Shanker and Jonas believe that would make the perfect place and time for  Tesla to show its Semi to the world for the first time and also to showcase its potential association with such industry partners as Schneider National, FedEx, XPO Logistics, US Xpress, and Ryder Systems. The pair says the unveiling could be “the biggest catalyst in trucking in decades.”

As exciting as the Tesla Semi might be, Shanker and Jonas are warning their clients not to get too carried away by its unveiling, even though it “could stoke investor interest/headlines in the stock again.” Ready for some stock analyst mumbo jumbo? Here ya go.

“We theoretically assume that Tesla can deliver 25k units of Class 8 electric trucks annually with battery leasing revenue from 300k trucks in operation driving 30 billion miles (300k trucks x 100k miles per truck per year). This would result in revenue of $0.25 per mile assuming a 50% gross margin on the battery business alone and a blended gross margin of 36% by 2028 (including 15% gross margin on OEM truck sales and 5% gross margin for 3PL logistics).

“We further assumed 15% SG&A/sales and 5% R&D/sales and a 25% tax rate to achieve $1.4bn of NOPAT on $11.7bn of revenues for Tesla Trucks by 2028. We value this on a DCF model assuming a 13% WACC and an exit multiple on NOPAT of 15x. We have assumed $1.7bn of up-front costs on top of Tesla’s current capex to launch the truck business of which ~$1bn is dedicated to tooling and manufacturing capacity with another $0.75bn for the battery swapping infrastructure, which consists of 1,500 locations (an average of 3 robots per location in servicing an average of 3 trucks per hour on a 24 hour/day schedule).

“We have assumed a cost per swapping station of $500k or roughly double the cost of the average Tesla supercharger station. These assumptions produce an NPV of $5.1bn or roughly 8% of Tesla’s current market cap.

There you have it folks. What it comes down to is, the analysts have peered deeply into their crystal balls and decided the Tesla Semi could add about 8% to the value of Tesla stock in the coming years. Whether their convoluted analysis will have much bearing on the fluctuations of Tesla stock in the days, weeks, and months to come is anyone’s guess. Notice that the analysts assume battery swapping is part of the plan for the Tesla Semi, something that Tesla itself has yet to confirm.

There is no question that Tesla’s involvement in the trucking industry will precisely the kind of disruptive impact Musk so dearly loves. Cummins announced its first all electric tractor last week and both Mercedes and BYD are not far behind. With luck, the era of the diesel tractor being the king of freight may soon be behind us, God willing and the creek don’t rise.

Source: Barron’s

Tesla Annual Meeting Brings News About Model Y, More Gigafactories, And The Solar Roof

Tesla held its annual meeting of shareholders yesterday. As usual, the biggest news of the day came from remarks made by Elon Musk during and after the meeting. The biggest structural news came when the shareholders approved a resolution permitting the company to continue electing its board members for three year terms.

Institutional investors in April called for one year terms, saying the move would make the board more accountable to stockholders. But Musk countered that longer terms promote better long term thinking. At the meeting, a majority of stockholders agreed with Musk, according to Bloomberg.

Model Y News

The big news of the day was an announcement that the upcoming Model Y is now scheduled for production in 2019 and will not be built on the Model 3 chassis. Musk says he and Tesla learned their lesson by trying to cram the Model X into the Model S chassis instead of designing an SUV from the ground up. That happened because “I’m an idiot,” Musk says.

The Model X may be a great car, but is is only a so-so sport utility vehicle. Presumably, the Model Y will be larger than the Model 3, which has already been criticized for its limited cargo capacity. The Model Y will be built at a new dedicated production facility, whose location is still a secret.

Musk says simplifying the manufacturing process is now a top priority for the company. The Model 3 will have half as much wiring as the the Model S — about 1.5 kilometers worth. The Model Y’s wiring will be measured in meters, not kilometers.

Model 3

Musk told the audience that the Design Studio will go live at the end of next month, about the same time as the first production cars are rolling off the line at the Fremont factory. Those first cars will go to Tesla employees. At first, people will have a choice of colors and can pick from two available wheel and tire combinations. That’s it.

Dual motor all wheel drive will arrive sometime in 2019. Musk said getting the dual motors to work correctly is a challenge. One is optimized for urban driving and the other for highway travel. As the list of pre-orders grows, people who want to reserve one today may have to wait until 2019 to receive their cars, depending on where they live.

Musk expects demand for the Model Y to be greater than for the Model 3. He is talking these days about Tesla building several new factories and producing up to 6 million cars a year. If that turns out to be true, more than one legacy automaker will probably disappear entirely in the next few years.

Tesla Semi

Musk hinted that something special would happen at the first public showing of the Tesla Semi, currently scheduled to happen in September. The best guess is that perhaps a sneak preview of the Model Y might occur at the same time, but Musk refused to elaborate on his tease.

He told his audience that Tesla is working closely with potential customers. “We’re getting them closely involved in the design process, so the biggest customers of the heavy duty Tesla semi are helping ensure that it is specified to their needs, so it’s not a mystery. They already know that it’s going to meet their needs, because they’ve told us what those needs are. So it’ll really just be a question of scaling volume to make as many as we can.”

Production is slated to begin in 2 years.

More Gigafactories

The head of Tesla has said in the past the world will need 100 Gigafactories to meet its energy storage needs. “I hope I don’t have to build all of them myself,” he quipped at the time. He may not have to, but he is planning a good portion of them.

Musk announced that between 10 and 20 more Gigafactories are planned. People around the world are anxious to know where they might be located. Musk’s plans mean Tesla could control 20% of all battery production at some point in the future.

Solar Roof Simplicity

Lego Tesla House by Asher Field. Photo by Kyle Field

The audience was told that the new Tesla Solar Roof is designed for simplicity of installation. “It should go together like Legos,” Musk said. Ease of installation will help drive down prices for consumers. The idea of a Lego roof inspired the child of colleague Kyle Field to create a representation of a fully integrated solar home using Legos. The kid has a future!

Tesla now has the ability to deliver a full sustainable energy solution to consumers between its solar panels, Solar Roof, and residential battery storage systems. “It’s a fully contained energy solution that can scale for the world,” Elon noted.

Does any of this mean Tesla stock should be more valuable than the stock of General Motors or Ford? The simple answer seems to be — barring some unforeseen economic disaster — yes, it does.

Source: CleanTechnica, The Verge  Photo credit: Tesla

Elon Musk Says Tesla Semi Coming In September

Elon Musk tweeted today that the much anticipated Tesla Semi is coming in September. It is no secret that selling luxury cars to the 1% is not going to have much affect on carbon dioxide levels in the atmosphere but finding a way to electrify the freight hauling component of the transportation sector just might.

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Tesla Semi truck unveil set for September. Team has done an amazing job. Seriously next level.

1:51 PM - 13 Apr 2017

 
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What will the Tesla Semi look like? How much can it haul and for how long? How big is the battery? Will it have any sort of range extender engine/turbine/moonbeam collector? Nobody knows. Musk, as usual, is playing his Twitter followers like a Stradivarius, creating excitement with very little actual information.

Last July, Musk rolled out his Master Plan Part Deux (extra credit if  you know what “Part Deux” refers to). It included objectives like acquiring SolarCity, perfecting Autopilot, and creating a network that will allow Tesla owners share their cars with others. Then there was this item — expand the electric vehicle product line to address all major segments

Musk later explained one of those major segments was trucks for hauling freight. In February, he cranked up the magic Twitter machine once again to say, “Jerome is driving Tesla Semi and doing a great job with his team.” Jerome is  Jerome Guillen, former head of Tesla sales and service. He is now head of the Tesla Semi program. Before joining Tesla, he worked for Daimler Trucks North America on Class 8 truck development and headed up the Cascadia Class 8 truck team.

We can speculate on whether the Tesla Semi will be designed for short haul duty, like the tractors that haul freight from ports in southern California to the enormous distribution centers 20 miles inland or whether it will be capable of long haul tasks. It is hard to believe that the Tesla Semi will have enough pure battery power to lug an 80,000 pound cargo more than 100 miles or so.

For now, we are left to wonder. Perhaps Elon will Tweet more details soon. But the idea that some of the horrendous diesel emissions that follow in the wake of America’s tractor trailers will soon be eliminated by electric trucks is very encouraging news indeed.