It was difficult to resist the desire to laugh when Elon Musk outlined his aspirations to revolutionize the long-haul transportation industry five years ago.
The announcement of the Semi long-distance truck saw the Tesla Inc. CEO picking a fight not just with the established auto industry, but with basic economics and physics. This was well before he was developing flamethrowers and humanoid robots and haggling with Stephen King over Twitter subscription fees.
Density is not one of the many benefits of batteries. For passenger cars, this is not an issue, but when it comes to applications that require a lot of power, such as long-distance transportation, freight, and aviation, electric vehicles begin to struggle under the weight of their power plants.
A Class 8 semi-trailer can tow a 20-ton cargo 1,000 miles between fill-up stops if it has half a metric tonne of diesel in its tank. Lithium-ion cannot possibly compete. A fully loaded Volvo AB electric truck has a three-tonne, 540-kilowatt-hour battery that weighs as much as a rhinoceros. Tesla is coyer about the details of its batteries, but comparing its figures to those of Volvo, disassembling some of its cars, and learning more about its Powerwall battery all indicate that the 1,000 kWh power plant alone on its largest Semi would weigh close to six tonnes. That’s like an adult male elephant, or a bus, or a school bus, that’s empty.
The logistics sector has extremely poor margins. One of the largest US operators, JB Hunt Transport Services Inc., made approximately $1.63 per mile in revenue from its long-haul intermodal operation last year, with roughly half of that amount going toward fuel. Those tiny profits start to appear even thinner if you cut the payload to fit a pachydermic battery, reduce the range to allow a smaller power plant, spend more of the day hooked up to a Megacharger, or any combination of these.
Despite all the cynicism directed at the Tesla Semi, a vexing possibility has emerged: Musk may turn out to be the victor in the end.
What has altered?
That is not the solution; if Tesla had achieved significant strides in battery density, Musk would be bragging about them. However, there is one significant difference between 2022 and 2017: the price of diesel. US truck fuel expenses have increased to roughly twice what they were five years ago due to the loss in domestic oil refining and the pressure on energy prices in 2022. Even an electric rig that is twice as expensive to acquire as a conventional vehicle is achieving 12% cost savings every mile, which is equivalent to about $17,000 a year at typical usage levels, according to the logistics-data business ACT Research Co.’s trucking expenditure calculator. Although it might not persist when diesel prices return to normal, it’s near enough to give electric truckers a fighting chance.
The Semi is now being supported in part because it does not attempt to provide long-haul trucks with the full-spectrum competition. Its range between refueling stops is only half that of Class 8. The fact that a Frito-Lay plant would be one of its first clients is also telling. Few forms of freight will be more forgiving than feather-light pallets of potato chips if you’re concerned about the difficulties of moving hefty loads and your enormous batteries.
There are many niches in the wide and diverse field of logistics where electrified transportation can find a place to thrive. The most comfortable environment for battery trucks is probably during last-mile deliveries from warehouses to shops and residences. However, even in the more difficult environment of long-haul transportation, the modern economy moves many low-density cargoes like potato chips, throw pillows, and clothing. The 20 Tesla Semis that FedEx Corp. has ordered are a drop in the bucket compared to their 86,000-strong road fleet, so buyers can afford to experiment.
Musk might have used the same tactic he did with Tesla’s first electric Roadster. Tesla chose to go with the simple approach and create a high-end sports coupe where cost was not a consideration, while the rest of the passenger vehicle industry was battling to create a viable mass-market electric car. While the trucking industry was attempting to replace its most effective workhorses, Tesla is grabbing just enough market share to begin upending the status quo.
There is still no battery technology that can directly compete with Class 8 diesel trailers. But the Semi might be able to go close enough to electric trucks.