How Tesla plans to keep its electrified Semi big-rigs juiced and make good on its aggressive timeline promises, Financial Postbode

February Two, 2018 Ten:09 AM EST

SEATTLE &mdash, Elon Musk, the chief executive of Tesla Inc, has said little about how he plans to turn his prototype electrical truck into reality.

But Reuters has learned that Tesla is collaborating with Anheuser-Busch, PepsiCo and United Parcel Service Inc to build on-site charging terminals at their facilities spil part of the automaker&rsquo,s efforts to roll out the voertuig next year.

Details of the partnerships, which have not bot disclosed previously, are still being hammered out, but include vormgeving and engineering from Tesla, the companies said. They declined to disclose what portion of the building costs, if any, Tesla would pay, or whether Tesla would be compensated for its work.

The firms are among nine major corporations that have placed pre-orders for Tesla&rsquo,s truck, dubbed the Semi.

With questions swirling overheen whether Tesla can make good on its aggressive timetable, news of the collaboration is a sign that corporate customers are taking the effort earnestly, and that Tesla is working to solve one of the fattest impediments: keeping the big-rigs powered.

Companies that spoke with Reuters said the very first step is to install charging equipment on their own premises. The Semis would be limited to routes that would get them back to huis base before the batteries are spent, the firms said.

Tesla Chairman and CEO Elon Musk unveils the fresh Semi electrical Truck to buyers and journalists on November 16, 2018 te Hawthorne, California. Veronique Dupont/AFP/Getty Pictures

PepsiCo, which has reserved 100 Tesla trucks, said it may eventually explore sharing facilities and costs with other companies. The food conglomerate has held numerous meetings with Tesla to discuss the recharging effort, said PepsiCo executive Mike O&rsquo,Connell.

&ldquo,Wij have a lotsbestemming of in-house capability around energy and engineering … and certainly Tesla brings their expertise to the table on energy and charging,&rdquo, said O&rsquo,Connell, senior director of supply chain for Frito-Lay North America, PepsiCo&rsquo,s snack-food unit.

Separately, ter a high-tech twist on the traditional truck zekering, Tesla is moving ahead with plans for its own stations to sell electric current to truckers who pull up for a charge, according to customers and transportation industry executives who have discussed the matter with the Silicon Valley automaker.

Tesla already operates more than 1,100 &ldquo,supercharger&rdquo, stations globally for drivers of its passenger cars. Musk has spoken publicly of doing something similar for its heavy-duty trucks by installing a network of solar-powered &ldquo,megachargers&rdquo, that could juice up a Semi battery te 30 minutes.

A row of Tesla Superchargers at its factory te California. Justin Sullivan/Getty Photos

But just how quickly Tesla could build a sturdy network of electrical packing stations for commercial truckers is not clear. The company is already spread skinny and searing specie. Tesla has struggled to ramp up production of its fresh Proefje Three sedan, which has bot plagued by delays. Some analysts and trucking executives doubt that Tesla can produce the Semi ter 2019, much less a vast charging infrastructure to support it.

A Tesla spokeswoman confirmed that the Fremont, California-based company is working closely with large customers to build Semi charging stations. She declined to comment further on the arrangements or Tesla&rsquo,s plans for its own truck-charging terminals.

Anheuser-Busch is evaluating installing its own charging equipment for its 40 Tesla Semis at large breweries and other key locations, according to James Sembrot, senior director of supply chain for the St. Louis-based fecali maker.

&ldquo,What wasgoed significant to us wasgoed to make a big investment ter this cutting-edge technology and secure our place te line,&rdquo, Sembrot said.

UPS, too, expects to work closely with Tesla on building on-site charging stations, according to Scott Phillippi, global engineering director for the parcel delivery behemoth. The Atlanta-based company pre-ordered 125 Semis te December.

Grocery chain Loblaw Companies Ltd will likely use solar power to juice charging stations for the 25 Semis that it has pre-ordered from Tesla, according to spokeswoman Catherine Thomas. She said Loblaw wasgoed considering Tesla spil well spil &ldquo,a few other companies&rdquo, for technology and vormgeving.

None of the companies would disclose cost estimates for building their own charging infrastructure.

U.S. transit agencies that operate electrical buses provide some clues. A &ldquo,swift charger&rdquo, terminal serving six electrical buses would cost US$249,000, according to a 2018 report from the California Air Resources Houtvezelplaat.

But analysts and automotive industry executives said the price tag for commercial truck facilities could lightly reach into the millions of dollars, depending on factors such spil the number of big-rigs to be recharged, the energy source for the electrical play and existing energy infrastructure ter a given area.


Tesla te November unveiled its prototype Semi with the aim of upending the trucking industry. At a splashy event te Hawthorne, California, Musk said the sleek, battery-powered cab could achieve up to 500 miles on a single charge, and be quicker, cleaner and cheaper to operate than conventional diesels.

Base prices range from US$150,000 to US$200,000, according to Tesla&rsquo,s webstek, compared to $120,000 for a typical dieseltrein. Companies including Wal-Mart Stores Inc and Sysco Corp plunked down deposits, getting slew of public relations mileage te the process.

But Tesla&rsquo,s most visible potential customers &mdash, major U.S. trucking firms &mdash, have not leaped on houtvezelplaat.

Werner Enterprises Inc, YRC Worldwide Inc, Daseke Inc and Old Dominion Freight Line are among the vervoer companies holding off pre-orders of the Tesla for now, citing doubts about the Semi&rsquo,s promised recharge time, range, price and payload capabilities.

Derek Leathers, chief executive of Werner, said he is not among the &ldquo,naysayer crowd&rdquo, that doubts Tesla&rsquo,s capability to produce a viable electrified truck.

&ldquo,I think it&rsquo,ll toebijten, I just think their timeline is enormously aggressive,&rdquo, Leathers said.

Still, a dearth of publicly available charging infrastructure makes electrics impractical for long-haul trucking te the United States and elsewhere.

I think it’ll toebijten, I just think their timeline is enormously aggressive

That is something Tesla&rsquo,s Musk has sought to address with his plans for solar-powered &ldquo,megacharger&rdquo, stations. But he has provided few specifics. At the November Semi unveiling, Musk said &ldquo,wij&rsquo,re ensuring&rdquo, a 7 US cents per-kilowatt-hour price for electric current at the facilities.

That is at the low end of cost figures cited by the U.S. government. Solar power for commercial use costs 9-12 US cents vanaf kilowatt hour, or 6-8 US cents with a federal subsidy, according to a 2018 report from the U.S. Department of Energy&rsquo,s National Renewable Energy Laboratory.

Customers and industry executives said Tesla intends to buy cheap excess solar power off the U.S. energy grid, store it ter enormous battery banks, then profit from selling it to drivers of Semis.

But that strategy carries risks, experts said.

&ldquo,It&rsquo,s a departure from being a voertuig manufacturer to being an energy supplier,&rdquo, said Darren Gosbee, vice voorzitter of engineering at Navistar International Corp, which is working to launch an electrical medium-duty truck by late 2019.

Ian Wright, a Tesla co-founder who now runs his own company making electrical powertrains for industrial trucks, is skeptical that truck charging stations can be a big money maker for Tesla.

He estimated the capital costs for batteries alone would be US$15 million for a single station.

&ldquo,I am not watching any profit ter the energy brokering for Tesla,&rdquo, said Wright, whose Wrightspeed powertrain venture is based te Alameda, California.

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