Tesla’s “Master Plan, Part Deux” spends a large portion of its content on heavier transportation, especially cargo and buses. Tesla is an intelligently incrementalist company which is very data driven, so how is this likely to play out?
The first cut that’s necessary is about pickups in North America vs everything else that Tesla might do.
Consumer Pickup Trucks
Pickup truck drivers in North America are one of the most devotedly brand-oriented, styling-cue-oriented, nostalgia-oriented, and ICE-oriented groups I can think of. It’s kind of weird when you think that pickups are utility vehicles, but these are iconic utility vehicles.
The Ford F-150 is so dominant in the USA and Canada, that its position as market leader is measured in decades.
“Model-wise, the Ford F-Series is easily headed towards a 35th consecutive year at #1, which would mean 40 years in a row as the best-selling pickup in the U.S.”
It’s as popular with a certain class of North Americans as the Toyota Hilux is with terrorists.
The USA has this weird sub-culture of rolling coal. It’s about 99.9% pickup drivers as far as I can tell, who badly detune their diesel engines so that they intentionally emit huge volumes of black smoke, especially when being followed by anything which they consider a signifier of a green lifestyle: Priuses, electric cars, bicycles, etc. They are a toxic, nasty sub-group, but the point is that they are explicitly part of the pickup culture and could only have grown out of it.
The number of pickup trucks purchased is vastly out of line with the actually required number of utility vehicles of this class. The number of pickup trucks with low-profile tires and blemish-free paint jobs in every city in North America is indicative of what this class of vehicles really is. This is a macho culture which has roots in cowboy mythology and oil & gas roughneck blue collar workers.
So, will a Tesla consumer pickup do well? Not in North America for a long time in my opinion, even though an electric pickup would make an excellent utility vehicle. Thankfully, the rest of the world doesn’t have the weirdly toxic relationship with this class of utility vehicle, nor will most fleet owners.
My prediction is that Tesla won’t sell a lot of pickups directly to North American consumers for a long time and isn’t betting on that market. However, sales in the rest of the world will be just fine. The attributes that electric drivetrains allow for pickup trucks will make them much better workhorses than the current front-end-weighted, lossy drivetrain contraptions that do the jobs today.
[Editor’s note: I think Mike has a solid theory here, but I actually think that a Tesla pickup truck could win over this subculture just as it has the gearhead subculture. It’ll likely be the most “American-made” pickup, and the torque and resulting acceleration will be wicked and quickly win over the macho crowd, in my opinion. However, a bias against electric vehicles and the “snobby” Silicon Valley / California brand may be stronger than I imagine. And I’ll admit that interest in an electric pickup truck was abysmal in our first annual electric car report. We’ll have to wait to see if Tesla can break into this market or not. –Zach Shahan]
Fleet Pickups & Other Forms of Trucks & Buses
Where Tesla will do just fine → fleet vehicles. This class of vehicles is purchased much less on romantic and ahistoric belief sets fostered by movies, and much more on hard numbers. Fleet vehicles are measured on factors including the following:
- Initial capital cost
- Labour effort for maintenance
- Parts costs for maintenance
- Fuel costs
- Fit-for-purpose range
- Fit-for-purpose power
- Mean time between failures
Fleet vehicles are much more assessed on total cost of ownership (TCO) than personal vehicles. And the TCO for fleet vehicles is in favour of electrics today, and will be increasingly so in the future.
In general, electric vehicles require much less maintenance, have many fewer parts to replace, have longer-lasting drivetrains, are safer, have excellent torque characteristics, require fewer brake jobs, etc. Basically, they can be depended on to be on the road earning money a greater percentage of the time for a lower overall cost.
Utility pickup trucks owned by fleets are likely to do very well for Tesla.
Having taken care of the odd sub-class of American pickups, let’s move on to the differently interestingly classes of buses and freight vehicles.
What Tesla is saying about bus transit has a few parts:
- Buses will be autonomous
- Buses will have varied routes based upon varying demand and will bypass areas with no demand
- Buses will be callable
- Buses will be smaller
Really, what they are saying is that buses (on some routes, at least) are going to turn into autonomous, semi-scheduled, Uber passenger vans. Uber is already successfully doing Uber Hop and Uber Pool in major cities, with vans providing almost exactly this service but with human drivers. They are so successful that transit authorities are considering suing them in Toronto for providing transit services.
This is a proven and growing market and an autonomous small bus for semi-fixed routes would work brilliantly at lower cost. Tesla isn’t saying that it wants to replace diesel city buses with electric city buses (which BYD and Proterra are doing) — it is saying that huge buses are likely going away in many cases to be replaced by a different model. As Uber is already cutting into bus use in San Francisco and elsewhere, this disruption is already starting. How far it reaches is a matter of hot debate.
In my opinion, Tesla’s master plan is on point for where a large segment of future transit will be.
Here, again, there’s a path to be followed.
The first obvious thing to say is that single-unit trucks — not tractor trailers — travel about 70 billion miles in urban areas in the USA annually, and about 40 billion miles outside of urban areas.
70 billion miles. 64% of all miles traveled by this class of vehicle in the USA.
The average distance traveled by this class of truck is well within the range of current battery capacities at economically viable prices. They travel about as far annually as the average commuter car (13,476 miles), or maybe 60 miles on the average workday. The vast majority of these trucks operate, at most, two shifts a day, and loading of these trucks takes time when they could easily be hooked up to charge with simple under-loading dock charge connections at depots. This is a trivial market with current technology.
Fleet managers for this class of vehicle struggle with having enough torque to get up hills with heavier loads vs the smallest and most economical engine that they can possibly get. Electrics square that circle. If payback can get down to 3 years, it will become a no-brainer. Given that most payback assessments for Tesla Model S vehicles currently run to several years, that would be a challenge. However, the Tesla Model 3 is already in that range according to two different ways to analyse the question. It bodes well.
And a big part of the cost of these vehicles is associated with professional drivers — as opposed to more poorly paid loaders and unloaders — and liabilities related to hitting things in urban areas. Trucks that drive themselves reduce both of those costs substantially.
Tesla is going to win big with this category.
(Note, again, that BYD is already in this market, with a range of new delivery vehicles and trucks unveiled in May, and being bought in places like California.)
Combination trucks — tractor trailers — travel 76 billion miles annually in urban areas and 99 billion in rural areas (aka, between cities). They are much more likely to travel extended distances with an average annual mileage of 69,000 miles.
Long-distance haulage electric trucks, autonomous or not, are likely in the “too hard” category today. But not in a few years.
Going after long-haul semis would be like starting with the Tesla Model S in the truck space instead of the Roadster. It doesn’t seem like the right incremental choice. I think they could start with single-unit urban trucks, then urban-area tractor trailers, then long-haul tractor trailers. Tesla, according to some interpretations, has committed to unveiling a tractor-trailer product next year, but as there is a two year cycle between announcement and delivery, that still gives them 3 years to achieve the right range mix for at least medium-haul duties. After all, long-haul trucking has the same infrastructure problem long-haul driving does, and the Supercharger network is very poorly positioned to support tractor trailers. Transforming long-haul trucking will require remarkable range and new infrastructure, whether of battery swaps (proven Tesla technology) or freight-scale Superchargers. It’s not a trivial problem.
It is worth pointing out that those ubiquitous signs in urban areas about trucks avoiding the use of engine braking will slowly disappear as more trucks shift to electric. Regenerative braking is very quiet by comparison.
So, in heavier road vehicles, Tesla has obvious incrementalist paths for most categories. It’s going to be easier than anyone thinks and have an excellent impact on urban air quality and noise pollution, followed by a reduction in long-distance freight haulage emissions of all types. But US consumers aren’t likely to buy many of their pickups.
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