A long haul for Tesla trucks

Musk is en­ter­ing a niche where other firms al­ready are hard at work

Los Angeles Times - - BUSINESS - By Russ Mitchell

SAN FRAN­CISCO — There’s a cool new elec­tric semi truck com­ing around the bend.

It looks Space Age sleek: no gears, so no con­stant shift­ing. Recharg­ing the bat­tery is a lot cheaper than diesel fuel.

Finn Mur­phy, an in­de­pen­dent truck owner-op­er­a­tor, can’t wait to try it out. “The cab is larger, the liv­ing area is larger,” he said. “It’s very ex­cit­ing.”

The truck Mur­phy was de­scrib­ing? It’s the Nikola One, a fuel-cell elec­tric truck from Nikola Mo­tor in Salt Lake City that’s ex­pected to hit high­ways in 2021.

Not the much-hyped Tesla semi that Chief Ex­ec­u­tive Elon Musk is set to un­veil at an elab­o­rate stage out­side Los An­ge­les on Thurs­day night.

The event “will blow your mind clear out of your skull into an al­ter­nate di­men­sion,” Musk tweeted re­cently. He dis­cussed the truck, and dis­played a shad­owy photo, at a TED talk last April.

Musk could re­veal some amaz­ing tech­nol­ogy break­through on Thurs­day, a part­ner­ship with a big truck maker or some other sur­prise. But while Tesla had the lux­ury elec­tric car mar­ket to it­self when it up­ended the auto in­dus­try with the Model S sedan in 2012, the com­pany can’t yet claim to be a pi­o­neer in elec­tric semi trucks. It will en­ter the semi truck busi­ness with an ar­ray of com­peti­tors al­ready hard at work.

Heavy-duty fuel-cell trucks built by Toy­ota are mov­ing freight at the Port of Los An­ge­les. Cum­mins, the diesel en­gine maker, de­buted a pro­to­type elec­tric-drive semi in Au­gust.

BYD, a China-based com­pany with a big fac­tory in Lan­caster, is about to de­liver its first drayage semi trac­tor, with six more by the end of the year, to pull con­tain­ers around ports in Los An­ge­les, Long Beach and San Diego.

Daim­ler, the Ger­man mo­tor ve­hi­cle gi­ant best known for its Mercedes-Benz brand, is mak­ing elec­tric ur­ban de­liv­ery trucks and plans to put the Vi­sion One big rig on the mar­ket by 2022.

“Ba­si­cally every [truck] man­u­fac­turer is de­vel­op­ing bat­tery, fu­el­cell elec­tric or hy­brids,” said Andrew Swan­ton, vice pres­i­dent for truck sales at BYD Mo­tors North Amer­ica. “Peter­bilt, Ken­worth, Volvo.”

A slew of elec­tric semi start-ups in­cludes Wright­speed, run by Tesla co-founder Ian Wright, which retrofits stan­dard truck frames with its own ex­tended-range hy­brid elec­tric drive sys­tem; Proterra, an elec­tric bus builder in City of In­dus­try that plans to ex­pand into trucks; and Chanje, a Los An­ge­les com­pany that will assem­ble trucks from kits

sent from China.

The Tesla truck will be in­tro­duced with Au­topi­lot-like self-drive ca­pa­bil­i­ties. But com­peti­tors such as Google’s Waymo and Uberowned Otto and a slew of other start-ups will be sell­ing driver­less sys­tems to man­u­fac­tur­ers who aren’t de­vel­op­ing their own.

“We are ac­tively work­ing with all those soft­ware de­vel­op­ers,” Swan­ton said.

The rea­son for all this ac­tiv­ity is clear: Gov­ern­ments world­wide, in­clud­ing Cal­i­for­nia, are man­dat­ing and sub­si­diz­ing elec­tric ve­hi­cles to fight pol­lu­tion and global warm­ing. In fact, the trucks be­ing tested at the ports are sup­ported in part with Cal­i­for­nia tax­payer money.

At the same time, truck own­ers and ship­ping com­pa­nies are look­ing to cut fuel and main­te­nance costs. And self-drive trucks could re­move a huge la­bor ex­pense by cut­ting hu­man truck drivers out of the equa­tion. The lead­ers in those tech­nolo­gies could dom­i­nate the mar­ket.

Still, the elec­tric truck busi­ness is in its in­fancy. Long-range elec­tric heavy­duty semi trucks won’t over­take tra­di­tional trucks any­time soon, an­a­lysts say, in an in­dus­try where the main al­ter­na­tive to diesel fuel re­mains gaso­line.

Elec­tric pen­e­tra­tion of the big-rig mar­ket “isn’t go­ing to be very sig­nif­i­cant un­til af­ter 2025 or 2030,” said Antti Lind­strom, a truck in­dus­try spe­cial­ist at IHS Markit. “And even then, it will be very lim­ited com­pared to the to­tal num­ber of trucks be­ing sold.”

Lim­ited range and ex­cess pounds for bat­ter­ies will weigh on electrics for years. Every ex­tra pound means less freight can be car­ried on a fully loaded ve­hi­cle; the up­per limit in the U.S. for truck, trailer and freight is 80,000 pounds.

Range is cru­cial be­cause with to­day’s tech­nolo­gies it could take hours to charge up a heavy-duty truck bat­tery. Musk has talked about set­ting up bat­tery-swap­ping sta­tions, an ex­pen­sive propo­si­tion whose mar­ket ac­cep­tance can’t be de­ter­mined un­til it is tried.

The BYD port truck has a range of 100 miles — fine for mov­ing con­tain­ers from dock­side to rail­head but not for much else. Even then, it weighs 3,000 pounds more than an equiv­a­lent diesel trac­tor.

Ev­ery­one watch­ing Tesla has heard ru­mors that the truck will have a stated range of 200 to 300 miles. It will take a real mind-blow­ing break­through to achieve that range at rea­son­able weight and man­u­fac­tur­ing cost.

The up­shot: The Tesla truck won’t be bring­ing in cash for quite a while, and the com­pany has ur­gent mat­ters to ad­dress.

Right now, Tesla is hav­ing trou­ble han­dling what’s al­ready on its plate. The com­pact Model 3 sedan, whose clos­est gas-en­gine com­peti­tor is the BMW 3 se­ries, is off to a bad start. The com­pany sold 30 of them to its own em­ploy­ees in July, and since then only a few hun­dred have been pro­duced. The com­pany’s Fre­mont auto assem­bly op­er­a­tion and its gi­ant Gi­gafac­tory bat­tery plant are in what Musk has called “pro­duc­tion hell.”

That’s why some com­peti­tors pro­fess to be un­wor­ried about the Tesla truck.

“Ev­ery­body can do a one­off,” said Julie Furber, ex­ec­u­tive di­rec­tor of elec­tri­fi­ca­tion for Cum­mins. “As the Model 3 shows, putting a model into pro­duc­tion is a dif­fer­ent ket­tle of fish.”

Whether the Model 3 proves a hit or a flop, Musk al­ready has en­shrined him­self in au­to­mo­tive in­dus­try his­tory by prov­ing he could build and sell high-per­for­mance, cool-look­ing elec­tric cars when plenty of naysay­ers said he couldn’t.

He woke up a doz­ing auto in­dus­try, push­ing the bound­aries on self-driv­ing cars and lap­ping all au­tomak­ers with the suc­cess­ful de­ploy­ment of over-theair soft­ware up­dates to add new fea­tures and make soft­ware-re­pairable fixes. On all counts, the auto in­dus­try is strug­gling to catch up.

The truck mak­ers watched what hap­pened and vowed not to get caught off guard. They’ve be­gun spend­ing bil­lions on elec­tric pow­er­trains and au­ton­o­mous driv­ing tech­nol­ogy, which to­gether would re­duce fuel costs and wipe out la­bor costs, for po­ten­tially huge boosts to their bot­tom lines.

Daim­ler sells more heavy trucks around the globe than any­one: 415,108 in 2016 for $39 bil­lion. Daim­ler trucks op­er­ate un­der the Daim­ler and Mercedes­Benz badges and in the U.S., Daim­ler owns Freight­liner, Western Star and Thomas Built Buses.

“Daim­ler Trucks is mas­sive,” said Marc Llis­tosella, the high-en­ergy chief ex­ec­u­tive of Daim­ler Trucks Asia, based in Tokyo. “We know this busi­ness,” he said. “Why should we hand it over to Tesla, which has no ex­pe­ri­ence in trucks?”

His­tory, of course, is lit­tered with ex­am­ples of dead or di­min­ished in­dus­try lead­ers that proved so be­holden to ex­ist­ing busi­ness mod­els or prod­ucts that they couldn’t re­spond to young up­starts and shift­ing tech­nol­ogy.

Daim­ler is try­ing hard not to be among the vic­tims. Llis­tosella was dis­patched to In­dia to build a truck busi­ness there nearly from scratch and suc­ceeded. Now he’s the mo­ti­vat­ing force be­hind Daim­ler’s move into elec­tric trucks with its Mit­subishi Fuso unit.

Al­ready, Mit­subishi Fuso is sell­ing medium-duty elec­tric trucks un­der the name e-Can­ter. The first com­mer­cial cus­tomer is United Par­cel Ser­vice.

“We are leaner and smaller” than other Daim­ler di­vi­sions, and so faster and, per­haps, more in­no­va­tive, Llis­tosella said.

Tesla hasn’t said much about its truck. No one doubts it will be equipped with driver­less tech­nol­ogy — an­other fiercely com­pet­i­tive arena. Google is de­vel­op­ing au­ton­o­mous tech­nol­ogy that could ap­ply to trucks as well. Last year, ride-share ser­vice Uber bought Otto and its self­driv­ing truck tech­nol­ogy. (The deal led to a law­suit by Google’s Waymo unit, which claims theft of trade se­crets.)

It’s only a mat­ter of time be­fore driver­less trucks hit the high­ways, and that’s got drivers plenty wor­ried.

“The ul­ti­mate goal of th­ese com­pa­nies is to elim­i­nate the driver,” said Mur­phy, whose book about the trucker life, “The Long Haul,” was pub­lished re­cently.

“That will save a lot of lives,” he said. “On the other hand, you’ll have 21⁄2 mil­lion truck drivers ap­ply­ing for jobs at Wal-Mart.”

Tesla

TESLA CHIEF Ex­ec­u­tive Elon Musk is set to un­veil the elec­tric Tesla semi truck at an event in Los An­ge­les on Thurs­day night.

Ju­lian Straten­schulte AFP/Getty Images

DAIM­LER, the Ger­man mo­tor ve­hi­cle gi­ant best known for its Mercedes-Benz brand, is mak­ing elec­tric ur­ban de­liv­ery trucks and plans to put the Vi­sion One big rig on the mar­ket by 2022. Above, Mercedes con­cept ve­hi­cles and a drone are on dis­play last year in Germany.

Peter Parks AFP/Getty Images

TESLA chief Elon Musk. Range is cru­cial for elec­tric semis be­cause recharg­ing could take hours. Tesla’s semi is ru­mored to have a range of 200 to 300 miles.

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