In a speech on January 23, Nevada Governor Joe Lombardo told his audience that Tesla plans to invest an additional $3.6 billion to expand its gigafactory, its first ever, outside of Reno. The expansion will add two production facilities to the existing gigafactory — one to manufacture the Tesla Semi electric Class 8 truck and the other to produce 100 GWh annually of 4680 battery cells. Between the two, Tesla plans to add 3000 new workers. Tesla published a blog post the next day that said:
Since 2014, we have invested $6.2 billion in Nevada and built a 5.4 million square foot Gigafactory — a cornerstone of our mission to accelerate the world’s transition to sustainable energy. The buildout alone provided 17,000 local construction jobs. To date, the team at Gigafactory Nevada has successfully produced:
- 7.3 billion battery cells (37 GWh+ annually)
- 1.5 million battery packs
- 3.6 million drive units
- 1 million energy modules (14 GWh+ total)
To complete this work, we directly hired more than 11,000 team members.
We will be investing over $3.6 billion more to continue growing Gigafactory Nevada, adding 3,000 new team members and two new factories: a 100 GWh 4680 cell factory (with capacity to produce enough batteries for 1.5 million light duty vehicles annually), as well as our first high volume Semi factory. Semi is our fully electric combination truck with 500 miles of range and energy consumption of less than 2 KWh per mile.
Thank you to the Tesla team, our supply chain partners and the local community that has made accelerating the world’s transition to sustainable energy possible at Gigafactory Nevada.
The Tale Of The Tesla Semi
The The Tesla Semi has followed a now familiar trajectory for the company. It was first announced by Elon Musk in 2017 amidst a flurry of hyperventilating happy talk. Then little was heard about it save for some photos on social media of trucks driving around the outskirts of the factory or charging at Supercharger locations here and there. It was not until last December that a few Semis were delivered to Frito-Lay in a much publicized ceremony in Nevada.
Since work on the new factories in Nevada has not begun yet, we can presume the start of volume production is about 18 to 24 months away. In other words, the vehicles won’t be hitting the roads of America in large quantities until 2024 at the earliest. That’s 7 years after the initial announcement, which is right on schedule in the magical world of Musk. Not that other companies are making large numbers of electric Class 8 trucks these days. It is still big news when Freightliner or Volvo delivers 4 or 5 of them. Decarbonizing the heavy truck industry is going to be slow going.
There is much work to be done. The charging infrastructure for Class 8 trucks is virtually nonexistent today. Although Tesla has developed its so-called Megacharger, which reportedly has up to 1,000 kW of charging power, they exist today only at the Nevada or Fremont factories.
The Business Case For Electric Trucks
No doubt Tesla has done the math to support its plan to manufacture the Semi. Even though Elon claims the truck will be a blast to drive, fleet operators care little about anything but the bottom line. In the ultra-competitive world of freight handling, costs are figured down to the tenth of a cent per mile over the lifetime of each vehicle.
Electric trucks should have lower fuel costs, as electricity is much cheaper than diesel fuel. They also should require less maintenance, since their drivetrains have only a few moving parts compared to the thousands of pieces whirring and banging around inside a typical diesel engine and heavy-duty transmission. On the other hand, adding charging equipment to depots can be costly and the upfront price of acquisition is higher for an electric truck than a conventional truck.
There have been photos circulating on social media lately that purport to show a Tesla Semi or two broken down on the side of a highway — not the sort of thing that instills confidence in a fleet manager contemplating the purchase of a few million dollars worth of new trucks. Nevertheless, teething pains are to be expected for any new product. Over the 10 to 12 year expected useful life of a heavy-duty truck, the Tesla Semi should still pencil out as a less expensive alternative to a diesel-powered tractor. The $40,000 federal tax credit for heavy-duty electric vehicles should help as well.
As of this moment, Tesla has not announced prices or other specifications for the Semi, so it’s hard to say with certainty where the break even point for its electric trucks will be.
The Frito-Lay Experience
PepsiCo, the parent company of Frito-Lay, has placed an order for 100 Tesla Semi trucks and is reconfiguring its manufacturing and distribution center near Modesto, California, to be a “showcase for sustainable manufacturing, warehousing, and distribution technologies,” according to a January 18 press release. It is the first Frito-Lay manufacturing facility to implement site-wide alternative fuel vehicles, onsite renewable energy generation, energy storage equipment, and employee electric vehicle charging stations, the company says.
Its public image is a valuable asset to any company, although putting a precise value on it is impossible. “At Frito-Lay and PepsiCo, we are dedicated to operating within our planetary bounds and inspiring positive change. The transformation at Modesto is in direct support of our PepsiCo Positive (pep+) commitment to building a circular and inclusive value chain and achieving net zero emissions by 2040,” said Steven Williams, CEO of PepsiCo Foods North America. “To date, the Frito-Lay Modesto transformation has resulted in a 91 percent reduction in greenhouse gas (GHG) emissions from direct fleet operations.” The Modesto facility now boasts:
- Three BYD 8Y electric yard tractors. Each yard tractor operates 20 hours per day and moves more than 150 trailers while only charging for two hours every day.
- 1-megawatt solar carport with energy storage, which doubles the amount of solar generation capacity at the facility by supplementing the site’s 1-megawatt of rooftop solar panels.
- 12 Crown Li-ion forklifts powered by lithium-ion batteries to improve energy and time efficiency.
- 2.7 MWh of on-site battery storage to help reduce the site’s electricity costs and support grid capacity by reducing the facility’s electricity load on the grid during peak times.
- Electric Tesla over the road semis and four Tesla 750kW charging stations to provide the semis with up to 400 miles of range in 1 hour of charging.
- 38 Volvo VNL compressed natural gas (CNG) tractors fueled by CNG with RNG attributes from a nearby, public access CNG fueling station owned and operated by Beyond6.
- Six Peterbilt 220EV electric box trucks that provide zero emission last mile delivery into the Modesto community
- Seven dual-head employee electric vehicle charging stations capable of charging up to 14 vehicles at one time.
Transforming An Industry
New York Times correspondent Jack Ewing wrote this week, “If the Tesla [Semi] is a success, it could put pressure on established truck makers that carmakers faced from Tesla’s electric cars and sport utility vehicles. The success of Tesla cars forced General Motors, Ford Motor, Volkswagen and other automakers to reply with their own electric vehicles, upending the industry.
“But it is unclear how many truck buyers will switch to electric vehicles, and how quickly. Fleet owners pay close attention to the cost of ownership of the vehicles they buy, carefully calculating the price of fuel, maintenance and driver downtime. Tesla’s semi is likely to cost more to buy than a conventional heavy truck, and will be attractive only if customers figure they can make up the difference in lower fuel and maintenance expenses.”
He’s right. Despite all the hype and hope from Tesla, electric trucks are going to have to prove themselves in the workplace. The final chapter on the Tesla Semi, and electric heavy duty trucks in general, is still years away from being written.
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