After more than a decade of making cars and SUVs — and, more recently, solar panels — Tesla Inc. wants to electrify a new type of vehicle: big trucks.
The company unveiled its new electric semitractor-trailer Thursday night near its design center in Hawthorne, California.
CEO Elon Musk said the semi is capable of traveling 500 miles (804 kilometers) on an electric charge — even with a full 80,000-pound (36,287-kilogram) load — and will cost less than a diesel semi considering fuel savings, lower maintenance and other factors. Musk said customers can put down a $5,000 deposit for the semi now and production will begin in 2019.
This photo provided by Tesla shows the front of the new electric semitractor-trailer unveiled on Thursday, Nov. 16, 2017. The move fits with Tesla CEO Elon Musk's stated goal for the company of accelerating the shift to sustainable transportation. (Tesla via AP)
"We're confident that this is a product that's better in every way from a feature standpoint," Musk told a crowd of Tesla fans gathered for the unveiling. Musk didn't reveal the semi's price.
Even so, the company already is starting to get orders. Wal-Mart Stores Inc., the world's largest retailer, said in a statement Friday that it has pre-ordered five Tesla units in its Walmart U.S. division and 10 units at Walmart Canada. Midwest retailer Meijer said it has reserved four trucks. And Arkansas trucking company J.B. Hunt said it has reserved "multiple" tractors that it will deploy on the West Coast but didn't specify how many.
The truck will have Tesla's Autopilot system, which can maintain a set speed and slow down automatically in traffic. It also has a system that automatically keeps the vehicle in its lane. Musk said several Tesla semis will be able to travel in a convoy, autonomously following each other.
Musk said Tesla plans a worldwide network of solar-powered "megachargers" that could get the trucks back up to 400 miles of range after charging for only 30 minutes.
The move fits with Musk's stated goal for the company of accelerating the shift to sustainable transportation. Trucks account for nearly a quarter of transportation-related greenhouse gas emissions in the U.S., according to government statistics.
This photo provided by Tesla shows the new electric semitractor-trailer unveiled on Thursday, Nov. 16, 2017. The move fits with Tesla CEO Elon Musk's stated goal for the company of accelerating the shift to sustainable transportation. (Tesla via AP)
But the semi also piles on more chaos at the Palo Alto, California-based company. Tesla is way behind on production of the Model 3, a new lower-cost sedan, with some customers facing waits of 18 months or more. It's also ramping up production of solar panels after buying Solar City Corp. last year. Tesla is working on a pickup truck and a lower-cost SUV and negotiating a new factory in China. Meanwhile, the company posted a record quarterly loss of $619 million in its most recent quarter.
On Thursday night, Tesla surprised fans with another product: An updated version of its first sports car, the Roadster. Tesla says the new Roadster will have 620 miles of range and a top speed of 250 mph (402 kph). The car, coming in 2020, will have a base price of $200,000.
Musk, too, is being pulled in many directions. He leads rocket maker SpaceX and is dabbling in other projects, including high-speed transit, artificial intelligence research and a new company that's digging tunnels beneath Los Angeles to alleviate traffic congestion.
"He's got so much on his plate right now. This could present another distraction from really just making sure that the Model 3 is moved along effectively," said Bruce Clark, a senior vice president and automotive analyst at Moody's.
This photo provided by Tesla shows the front of the new electric semitractor-trailer unveiled on Thursday, Nov. 16, 2017. The move fits with Tesla CEO Elon Musk's stated goal for the company of accelerating the shift to sustainable transportation. (Tesla via AP)
Tesla's semi is venturing into an uncertain market. Demand for electric trucks is expected to grow over the next decade as the U.S., Europe and China all tighten their emissions regulations. Electric truck sales totaled 4,100 in 2016, but are expected to grow to more than 70,000 in 2026, says Navigant Research.
But most of that growth is expected to be for smaller, medium-duty haulers like garbage trucks or delivery vans. Those trucks can have a more limited range of 100 miles (160 kilometers) or less, which requires fewer expensive batteries. They can also be fully charged overnight.
Long-haul semi trucks, on the other hand, would be expected to go greater distances, and that would be challenging. Right now, there's little charging infrastructure on global highways. Without Tesla's promised fast-charging, even a mid-sized truck would likely require a two-hour stop, cutting into companies' efficiency and profits, says Brian Irwin, managing director of the North American industrial group for the consulting firm Accenture.
Irwin says truck companies will have to watch the market carefully, because tougher regulations on diesels or an improvement in charging infrastructure could make electric trucks more viable very quickly. Falling battery costs also will help make electric trucks more appealing compared to diesels.
This photo provided by Tesla shows the interior overview of the new electric semitractor-trailer unveiled on Thursday, Nov. 16, 2017. The move fits with Tesla CEO Elon Musk's stated goal for the company of accelerating the shift to sustainable transportation. (Tesla via AP)
But even lower costs won't make trucking a sure bet for Tesla. It faces stiff competition from long-trusted brands like Daimler AG, which unveiled its own semi prototype last month.
"These are business people, not fans, and they will need convinced that this truck is better for their balance sheet than existing technology. It probably is, based on the specs provided, but this isn't necessarily a slam dunk," said Rebecca Lindland, an executive analyst at Kelley Blue Book.
Musk said Tesla will guarantee the semi's powertrain for one million miles to help alleviate customers' concerns.
Tesla's stock tumbled below $150 per share, giving up all of the gains made over the past year as the electric vehicle maker reels from falling sales and steep discounts intended to lure more buyers.
Shares in the Elon Musk-owned company slid nearly 4% in intraday trading Thursday, in what now stands as the third worst week for the stock in 2024, a year that has been dismal for Tesla investors. The Austin, Texas company's shares are down 12.4% this week and more than 39% this year.
Shares of Tesla Inc. last traded at the $150 level in January 2023.
It's also been a bad year for employees. Tesla said Monday that it was cutting 10% of its staff globally, about 14,000 jobs. The next day, Tesla announced it would try to re-instate Musk's $56 billion pay package that was rejected by a Delaware judge in January, who said that the arrangement was dictated by Musk and was the product of sham negotiations with directors who were not independent of him.
At the time of the Delaware court ruling, Musk’s package was worth more than $55.8 billion, but the stock slide has cut that to $44.9 billion at the close of trading on Friday, according to a company filing this week.
Tesla shares hit an all-time intraday high of $415.50 in November of 2021, adjusted for a 3-for-1 stock split that took effect in August 2022.
Tesla sales fell sharply last quarter as competition increased worldwide, electric vehicle sales growth slowed, and price cuts failed to draw more buyers. The company said it delivered 386,810 vehicles from January through March, nearly 9% below the 423,000 it sold in the same quarter of last year.
Dan Ives, an analyst with Wedbush who has been very bullish on Tesla’s stock, called the first quarter sales numbers an “unmitigated disaster."
“For Musk, this is a fork in the road time to get Tesla through this turbulent period otherwise dark days could be ahead,” Ives wrote this week.
Yet on Thursday, Deutsche Bank joined other industry analysts in voicing concern over Musk's big bet on autonomous vehicles as it stripped the company of its “buy” rating, citing Tesla’s “change of strategic priority to Robotaxi.”
Wall Street expects that Tesla will report a decline in first quarter earnings next week and many are wondering if there’s any near-term catalyst for growth that would end Tesla’s stock slide. Industry analysts were expecting a new small electric vehicle for the masses that would cost around $25,000, the Model 2, but there were reports last week that Musk was scrapping that project.
Musk disputed the reports, but wrote on X, the social media platform that he owns, that Tesla would unveil a robotaxi at an event on Aug. 8.
Uncertainty over the release of a cheaper vehicle from Tesla has altered the equation for analysts like Deutche Bank's Emmanuel Rosner.
Such a delay would tie Tesla's future more closely to “cracking the code on full driverless autonomy, which represents a significant technological, regulatory and operational challenge. We view Tesla’s shift as thesis-changing,” Rosner wrote.
Since last year, Tesla has cut prices as much as $20,000 on some models as it faced increasing competition and slowing demand.
Other automakers also have had to cut electric vehicle production and reduce prices to move EVs off dealership lots. Ford, for instance, cut production of the F-150 Lightning electric pickup, and lopped up to $8,100 off the price of the Mustang Mach E electric SUV in order to sell 2023 models.
U.S. electric vehicle sales growth slowed to 3.3% in the first quarter of the year, far below the 47% increase that fueled record sales and a 7.6% market share last year. Sales of new vehicles overall grew 5.1%, and the EV market share declined to 7.15%.
In addition to massive job cuts this week, Tesla this week announced the departure of two high-placed executives.
Andrew Baglino, Tesla’s senior vice president of powertrain and energy engineering, is leaving after 18 years with the company.
Rohan Patel, senior global director of public policy and business development and eight-year Tesla veteran, is also departing.
FILE - Drivers charge their Teslas in Santa Ana, Calif., on March 20, 2024. After reporting dismal first-quarter sales, Tesla is planning to lay off about a tenth of its workforce as it tries to cut costs, multiple media outlets reported Monday.(Jeff Gritchen/The Orange County Register via AP, File)
FILE - An 2023 Model X sits outside a Tesla dealership on June 18, 2023, in Englewood, Colo. After reporting dismal first-quarter sales, Tesla is planning to lay off about a tenth of its workforce as it tries to cut costs, multiple media outlets reported Monday. (AP Photo/David Zalubowski, File)
FILE - Tesla CEO Elon Musk leaves the Tesla Gigafactory for electric cars after a visit in Gruenheide near Berlin, Germany, on March 13, 2024. Elon Musk will ask Tesla shareholders to reinstate the compensation package that was rejected by a judge in Delaware this year and to move the electric carmaker’s corporate home from Delaware to Texas. (AP Photo/Ebrahim Noroozi, File)
FILE - The Tesla logo is displayed at the company's store in Cherry Creek Mall, Feb. 9, 2019, in Denver. Tesla's stock tumbled below $150 per share Thursday, April 18, 2024, giving up all of the gains made over the past year as the electric vehicle maker reels from falling sales and steep discounts intended to lure more buyers. (AP Photo/David Zalubowski, File)