Technical visionary Elon Musk, who has pioneered both alternative energy and transportation technology, has a new product announcement that will “blow your mind clear out of your skull and into an alternate dimension.” That announcement is set for Thursday evening and has nothing to do with Musk’s SpaceX or Solar City, nor is the announcement about Tesla’s electric cars. The announcement has to do with Tesla electric trucks. Beyond the hype, what is the realistic future for the electric trucks?
Elon Musk takes the barbs of short sellers personally
With nearly a $9 billion short position against Tesla stock, Musk is feeling the pressure.
“They’re jerks who want us to die,” Musk told his kids, according to Rolling Stone journalist Neil Strauss. “They’re constantly trying to make up false rumors and amplify any negative rumors. It’s a really big incentive to lie and attack my integrity. It’s really awful.”
In some quarters, Musk is considered a visionary. The founder of SpaceX, the first major completion to the likes of Boeing and other defense industry behemoth corporations, envisioned a better way to re-use spaceships and changed the nature of the economics. His efforts in Tesla, to transform the streets by replacing carbon burning vehicles with the must-have elite trinket, has inserted Tesla vehicles into the societal zeitgeist.
To critics, however, Tesla and Musk’s visionary zeal comes from being a snake oil salesperson spinning yarns benchmarked but a stock that has yet to turn a profit. To them, Musk offers a hypnotic investment story that reads like a fairy tale that is in need of fact checking.
With Musk’s latest mind-blowing announcement on trucks coming Thursday, can his vision sustain a profit?
The breaking point for Tesla electric trucks could come when the 600 mile range is broken
The first generation of Tesla electric trucks (and other brands) is coming, Bernstein notes, and their fully allocated cost could be near 5% to 7% lower than their diesel fuel guzzling brother.
But the issue isn’t absolute cost, but rather the battery range that is likely to tip the scales. In order to be commercially successful, the battery range must break the 600 mile range, David Vernon wrote in a November 14 report.
In the short-term, Bernstein thinks electric trucks may crack 25% to even 40% of the Class 8 truck market. But it won’t be until 2025 or 2030 that the electric semi-truck will break into the mainstream – a point at which battery life, the key metric, is properly addressed.
But overall as the new technology takes hold, Bernstein thinks something unusual might happen. “In the long run – after the mileage barrier has been passed – a more efficient truck market may end up being a lower rate truck market which would at the margin be bad for rail intermodal,” the report predicted.
When looking at his product launch, Musk might want to hold his emotions in check and address battery durability and ride duration rather than emotion.
When he introduced Tesla’s Model 3, he was carrying a secret. He had just broken up with his girlfriend, actress Amber Herd, and was heartbroken.
“I was really in love, and it hurt bad,” Musk told Rolling Stone. “I’ve been in severe emotional pain for the last few weeks,” Musk continued. “Severe. It took every ounce of will to be able to do the Model 3 event and not look like the most depressed guy around. For most of that day, I was morbid. And then I had to psych myself up: drink a couple of Red Bulls, hang out with positive people and then, like, tell myself: ‘I have all these people depending on me. All right, do it!’”
Stick to the script, Elon, and address Tesla eelectric trucks, specifically batteries, not your dating details.