In Modesto, California, some
of the very first Tesla Semis are hitting the
roads. The Tesla that you can see
behind us is fully operational. They're
running up and down the road within a 400-mile radius,
delivering product to all of our distribution locations
and to our customers. We use them the same way
you would see any traditional class eight
vehicle delivering product. PepsiCo, which owns Cheetos,
Doritos and other Frito-Lay products, preordered 100
back in 2017. Walmart and FedEx have also
placed preorders, but Pepsi was the first customer to
take delivery of the new truck. PepsiCo owns one of the
largest private fleets in North America, and that's
one of the reasons we have partnered with Tesla. We have the 15 in Modesto
that we're launching, and then we have 21 in
Sacramento. And then we are working
plans for the additional units up to the hundred. First announced in 2017, the
Semi has been one of the longest delayed products in
Tesla's history. What makes the Tesla Semi so
different, and really Elon Musk's introduction of it,
is he really brought the awareness to the broader
public. He made trucking sexy. And it could also be its
vehicle with the biggest impact. Even though trucks are only
a small portion of all the vehicles operating on
California's roads, they're responsible for the vast
majority of carcinogenic diesel particulate matter. Although it's only 1% of
vehicle production, it's 20% of vehicle emissions, and
it's over a third of all the particulate emissions. The need for alternatives to
diesel is steadily rising as stricter emission
regulations are established. In California, at the ports,
you're not going to be able to use an ICE engine truck
in the near future. Electric is an ideal
solution for that. But the launch of the new
electric truck hasn't been without issues. There have
been a few sightings of the Semi breaking down around
Northern California. We can have a concept
vehicle, it can look great on stage. It can look
really compelling and exciting and talk about a
whole new future. The realities are quite
different. Welcome to the Tesla Semi
truck event. I hope you like what you
see. We're confident that this is
a product that is better in every way from a feature
standpoint, that wins on economics against diesel
trucks in a worst case scenario, and that defeats
rail in a convoy scenario. At the time, Musk said the
Semi would go into production in 2019 and made
other promises about the truck's capabilities. It really shocked, no pun
intended, a lot of the population about a lot of
the performance metrics. But delays caused the
original timeline to slip. Five years later, the Semi
has finally arrived. We're incredibly excited
tonight to actually deliver our first production Tesla
Semi trucks. And yeah, we're looking
forward to actually delivering our first
production trucks to PepsiCo. Yeah, sorry for
the delay. Omitted from the event
though were details around the economics, million mile
guarantee and Autopilot features announced at the
original 2017 unveiling. When Elon Musk introduced
the Tesla Semi, it was a big deal. It felt like this was
a revolutionary moment for trucking. Fast forward five
years when they delivered the Tesla Semi to PepsiCo,
it was actually a much different sort of
experience. It felt like they were dialing it in. They had promised these
things and were going to deliver them, but it just
didn't feel like it had the hype that we had a couple
of years ago. The trucks Pepsi received
don't have autonomous features activated yet. The autonomous functionality
of Tesla is not specced for these vehicles. They have
the hardware capability. We'll get to that down the
road as an additional capability. When it was announced, the
truck was touted to have an industry leading 500 mile
range. 500 mile range. And by the way, it's 500
miles at maximum weight at highway speed. There have
been some initial reports that it can't handle the
weight or the distance that was initially promised. And so it's more of a wait
and see. To start, Pepsi is
delivering Frito-Lay products around 425 miles
per charge. It's also delivering Pepsi
out of its Sacramento warehouse on 100 mile daily
routes, going directly to stores and 300 to 400 mile
runs to other warehouses. The contents that are the
trailer can weigh about 45,000 lbs, is really the
accepted weight. And potato chips are made
of a lot of air. When we look at soda cans,
aluminum and liquids, these things weigh a lot
and they will weigh out. Pepsi wouldn't speak to the
price of the trucks, but it is estimated to cost around
$180,000. The cost benefit is still a
bit of a question mark because I think the price
new of an electric truck isn't quite settled yet. I think it's safe to assume
that it'll be at least double the price of the
equivalent diesel model. First generation and early
development has additional research funding and all
that. That's where the
partnership and support comes in. But ongoing, we
believe there is a positive economic business case for
electrifying the fleet. But experts are predicting
that electric trucks will be cheaper to operate over
time. When you take everything
into account, a diesel truck will be 20% more expensive
than a Tesla Semi per mile. If you have a predictable
charging cost, you can eliminate the expense of
fuel and the more volatile pricing that comes along
with fuel. The big cost savings that a
lot of people are seeing as they transition to EVs is
the amount of maintenance is significantly lower than
traditional vehicles. Obviously many fleets are
thinking about it from that perspective, that total
lifetime cost is significantly better. Diesel vehicle storage tanks
are cheaper and the fuel is more expensive, electricity
is more affordable, batteries are more
expensive. There's always a constant dynamic between
those two. And so we like to diversify
our portfolio of solutions. Starting in 2019, Frito-Lay
has been transforming its Modesto facility to
demonstrate the sustainable benefits of zero and near
zero emission technologies. This project has delivered a
91% reduction in greenhouse gas, and we're using this
as a showcase to then cascade to our other
operations. PepsiCo partnered with the
California Air Resources Board to make it all
happen, matching its $15.4 million in incentives to
purchase vehicles, including Tesla Semis, to add to its
fleet of over 80,000 assets. We developed what's called
the Zero and Near Zero Emissions Freight
Facilities pilot program back in the 2019 time
frame. And this Frito-Lay facility
won one of those grants for a complete transformation
of this facility to zero emissions. We thought it would make a
smart move to make the deposit, partner with
Tesla. So we put a deposit down
several years ago for 100 units when they first
announced. We thought it would have great
application. We had the experience from the last
ten years with other EV products. Pepsi received its first
Tesla Semis in December and already has them in use. It takes us a couple of
weeks between up fitting, logoing, labeling and
driver training. We'll continue to scale
that up where over the next several months, most of the
drivers will be certified and trained to drive the
Tesla vehicles. The trucks have replaced
routes previously being served by diesel. This vehicle right here with
a 400 mile range enables the driver to leave from
Modesto and return home without stopping and
charging anywhere along the route. Our average length of haul
for over the road is about 425 miles, so we believe
across the entire portfolio at Frito-Lay and Beverages
that the Tesla Semis will meet our delivery needs
based on our network. To charge the trucks,
Frito-lay installed four Megachargers, Tesla's
latest charging technology. What you can see behind me
are our four Tesla Megachargers. They're
capable of charging 750 kilowatts. These trucks
here take about an hour to charge, which will give us
about 400 miles of range. The local utilities, the
Tesla infrastructure team, we had to bring additional
power into the site. Although Pepsi wouldn't
allow us to interview the drivers, O'Connell says
feedback has been positive. They like not needing to
fuel the vehicles. They come in and plug them
in and can leave them. And they like the overall
performance. In addition to the Tesla
Semis, Frito-Lay Modesto is also using electric trucks
from BYD and Peterbilt. We have six of these
Peterbilt electrified route trucks that are charged
onsite and used by our sales team to deliver our product
to any of our stores in the community here in Modesto. We have several hundred of
those vehicles in several locations that we've
implemented. The company is also using
compressed natural gas trucks. This is a fully operational
class eight CNG vehicle. We have 37 of them in
operations here in Modesto. We have the same complement
of range that you would see in any diesel tractor. Competition in the electric
truck space is heating up. As the Tesla semi enters
service, it comes at a time when several truck
manufacturers are embracing the transition to electric
and alternative fuels. All the traditional diesel
truck manufacturers also have electric truck
offerings. So your Freightliners, Kenworths,
Peterbilts, Volvos, Macks, International, they all
have electric trucks that are out there already. Volvo just recently launched
its VNR Electric Semi, a class eight truck with a
565-kilowatt battery capable of up to 275 miles of
range. Daimler has announced plans
to develop its own heavy-duty electric truck,
the Mercedes-Benz eActros LongHaul, that will have a
range of around 310 miles. Freightliner, also a part
of Daimler, has the eCascadia, a class eight
semi with a 315 and 475 kilowatt version,
offering up to 250 miles of range. One of the advantages that
other OEMs have over Tesla is that they know how to
sell into the over-the-road trucking business and into
the class eight environment. They've been doing it for
years. They have a lot of experience. They know what
fleets want. They know how they spec
trucks. They know what drivers want. They have
maintenance networks that exist across the country. They're just much better
positioned today than what Tesla is to sell into this
environment. But even with so much
activity in the space, it's still in early stages. To introduce an electric
vehicle that can solve the mission that's required of
these vehicles. It takes many years, many
designs and a lot of testing and a substantial amount of
investment. We're in the very early part of that
cycle and it's going to take a few years before we see
these vehicles become commercially viable. For trucking to go fully
electric, it will require significant charging
infrastructure development. There's a huge amount of
infrastructure that needs to be built. We think about it
as the kind of infrastructure that gets
built once a century. You had the railroads two
centuries ago, you had the National Highway Network a
century ago, and the scale is very similar to that. Charging sites for
heavy-duty trucks are much more demanding than your
average EV. If you have 20 semi trucks
charging all at one time, that's almost the same
amount of power that it would take to power 20 big
box stores. Think of that kind of scale
of power required. The reliability is also
very important. Fleet, for them, time is
money and they have to know that their vehicles will be
able to move when they want them to. Electric trucks also have a
weight problem. Compared to diesel, they're
much heavier, impacting the total load that they can
transport. The total weight, and that
includes the truck, trailer and the cargo, is 80,000
lbs i the United States. They have allowed through
some of the new regulation for electric vehicles to go
to 82,000 lbs, but that's the maximum gross weight
that a vehicle can have. For Tesla, scaling
manufacturing of its new truck will be an uphill
battle. We'll be ramping up Semi
production through next year. As everyone knows at
this point, it takes about a year to ramp up production. We're tentatively aiming
for 50,000 units in 2024 for Tesla Semi in North
America. That sounds extremely high
when you think that 240,000 class eight trucks built
total, Freightliner builds maybe 50,000 of those. So they're talking about
competing with the big dogs in the existing commercial
truck space. To meet this ambitious goal,
the company just announced it will expand its
Gigafactory in Nevada with a new 100 gigawatt hour cell
factory and a high volume factory to manufacture the
Semi. The numbers I saw, maybe 500
this year will be built. 500 this year I can
definitely see. 50,000 in 2024, I guess
we'll have to wait to see on that one. Despite the progress being
made, not all trucking can go emission free. If you look at diesel in
terms of the power you can produce in the engine, on a
weight basis, it produces far more power than what an
electric powertrain will do. So because of those trade
offs, you're effectively dealing with these
compromises that you don't have to make with diesel. Eventually, though,
regulations may force most freight operations to
abandon diesel. The more stringent EPA
regulations are coming out. There's going to be another
level of diesel emissions regulations going into
effect in 2027. This is going to be an all
of the above solution to meet EPA requirements. So we'll see some hydrogen
fuel cell trucks out there. We'll see plenty of natural
gas trucks out there probably. In the U.S., California has
been one of the most aggressive states in
driving this. California has a regulation
called Advanced Clean Trucks, which requires
manufacturers to sell an increasing proportion of
their sales as zero emissions and ultimately
getting to fully zero emissions by 2045 in all
sectors of the heavy-duty trucking industry. And with some of the
country's largest ports, it is putting significant
pressure on the industry to adapt. It is the epicenter of North
American import and export supply chain. And so what that means is
that if California forces the industry to go carbon
neutral and eliminate the internal combustion engine,
it means that automotive manufacturers and
manufacturers have zero recourse against that. They
will have to do this, because if they don't, they
won't be able to sell vehicles into the industry,
into one of the most important markets in the
entire world. Operationalizing any type of
fleet portfolio, electrified, natural gas,
renewable diesel, there are challenges, but you can
really make it all work without making as big a
trade offs as people think. The next 5 to 10 years,
you'll start to see a pretty significant inflection in
the S-curve for adoption, especially for commercial
vehicles, given that total cost of operation is
significantly more beneficial than ICE
vehicles. I'd say by the end of the decade, I would say
at least 50% of commercial fleets would be
electrified. We know we have the
technology and we have the policies in place. It's just a matter of
getting the coordination to happen and continuing to
make progress. You've got to give Elon Musk
credit. This guy promises an
enormously exciting future with really
transformational technologies. And he's a
world-class visionary that really is trying to set the
tone for everything. And he's put everybody on
notice and eventually they may get there. We may get
to a point where we actually see the performance metrics
that he's promised and the economics that he's
promised. But we're not there yet.
Honestly, as a whole, this one isn't too bad of a watch.
It ends on a rather humorous note of saying that the Tesla Semi "isn't quite there yet", despite the fact that they had PepsiCo saying that the truck is able to go the distances.
The competitors don't seem to have anything against Tesla. They're all sub 400mi range trucks, with Tesla being 400+mi in range, depending on driving conditions.
Also looks like the trucks have Autopilot hardware in them, but that they haven't enabled Autopilot yet. Wonder if it is Autopilot 3 or 4, or some "newer" truck version of Autopilot. I imagine it just hasn't been turned on yet because they need to collect data to train the system with.
Also makes me ponder how much the Tesla Semi will contribute to solving some of the mapping issues that Tesla has, where they're doing the multi-trip reconstruction stuff, and whether or not the Tesla semis will be able to help with that.
Not the hit piece I was thinking CNBC was going to do, but it was interesting to hear PepsiCo talk about it.
It’s all fun and games til the Cheetos cybertruck wrap drops
Worth the 16 minutes.
Odd observation: all the CCS trucks have the port on the left rear.
In the end, there was a comment about how it remains to be seen how well Tesla will do now that is going up against the "big dogs". Seems to me he should have said, "It remains to be seen how the old dogs will do now that the young and nimble Telsa big dog is here."
It’s the exact same poor arguments used against Tesla cars just rebadged against trucks.
Youtubers:
An Electric Truck is impossible and can't be made!!!!
Electric Trucks aren't practical and Tesla will never deliver a single one!!!
EV truck range will never work!!!!! <- We are here
Truck drivers will hate it!!!!!
blah blah blah
With the amount of driving the truck will do, I wonder what the lifespan of the batteries will be. And what the replacement costs will add up to.
The naysayer here in the Patagonia jacket tries so hard to pretend he is anything but. He slides in a compliment and you just know there is a "but....." coming and then he launches into his dialogue about "maybe" being able to be a game changer. He also mentions the "advantages" of diesel with zero context to the pollution being generated.