When Elon Musk announced Tesla’s electric semi, many industries took notice.
Particularly, freight transportation is a field where economical vehicles are in high demand. If the construction of a truck can help carriers cut costs, its something worth looking into by most estimations. However, there is still a great deal of skepticism surrounding the viability of electric trucks in the long-term.
But those doubts haven’t stopped Musk and Tesla from making a bold prediction about the future of this product and just how popular it will become.
During a conference call with analysts from Wall Street, Musk stated that Tesla would deliver 100,000 electric heavy-duty trucks every year in just four years.
While some electric trucks have already been preordered by ambitious carriers who look favorably upon the technology, a number like 100,000 may seem a bit bloated by some estimations. This is because such a number would equal about a third of the combined truck sales projected throughout the U.S., Canada, and Mexico in 2022. These numbers are based on forecasts by HIS Markit, a research firm.
Tesla lost $675 million in the last quarter of 2017, putting their yearly loss at just under $2 billion. While a substantial figure on paper, the loss was lower than analysts expected it to be. In addition, Tesla also reduced the rate at which they burned cash during the quarter, showing signs of a long-term initiative in effect.
If Tesla is holding back on their efforts now with hopes of reaping benefits in the future, they may have picked a good time. Freight demand is stronger than it has been in a while, and receivers are searching valiantly for shippers that can give them a good rate.
Recent shortages of both drivers and trucks have led some retailers to pay almost a third above market value for the transport they need. But with electric trucks on their fleet, carriers may be able to trim costs significantly. This could, in turn, help them offer the same service for more stable rates.
“If you take four years, I think, 100,000 units a year is a reasonable expectation. Maybe more, but that’s the right — roughly the right number,” Musk said.
Not everyone has been as supportive of these claims. Some trucking experts say Tesla could achieve such a goal by 2030 or 2040, but not within a short time-frame of four years. Even if the technology is there, the idea of mass producing these vehicles brings to mind plenty of questions about costs and efficiency.
Tesla’s previous claims about shipping hundreds of thousands of electric cars were also called into question after their new claims were made. The Model 3 sport sedan didn’t make it to mass production last year despite Tesla’s best efforts, which could also explain the hefty loss they reported.
Big names like Navistar International, Volvo Group, and Daimler AG currently dominate the trucking market. For Tesla to get on par with them, it will take both technology and a proper business strategy.