Tesla’s unveiling raises production concerns
Musk rolls out Roadster and electric truck, but is already late to deliver the Model 3 sedan
A day after Tesla CEO Elon Musk unveiled a $200,000 supercar and an electric semitrailer, questions were swirling about whether the infamously tardy company can meet its own delivery deadlines.
In a performance resembling theater Thursday night near Los Angeles, Musk revealed an electric semitrailer and — surprise — inside it was a new edition of the firm’s first vehicle, the Roadster. The car, he said, sets world speed records, and the truck outperforms diesel in every way.
But skepticism met Musk’s claims that the truck would be available in 2019 and the Roadster in 2020. In the company’s most recent earnings report, Musk admitted that production of Tesla’s entry-level sedan, the Model 3, had been delayed three months, and that the company had suffered a $619 million quarterly loss. The company’s Model S sedan and Model X SUV were plagued by delays.
“Elon’s showmanship remains intact, even as his customers’ patience for Model 3 delivery wanes,” said Karl Brauer, executive publisher of Kelley Blue Book and Autotrader.
“The specs on the new semitruck and sports car would put both vehicles at the top of their segments — assuming they can be produced and sold as part of a sustainable business plan. So far that final element has eluded
Tesla Motors, which makes it difficult to see these vehicles as more than ‘what if’ concept cars.”
Kelley Blue Book analyst Rebecca Lindland added that the Roadster was “fabulous” and Musk’s ambition “admirable.”
“But,” Lindland said, “as a Model 3 depositor looking at an 18-month wait, I do wish he was a little bit further along in the delivery process before embarking on yet another new vehicle, let alone a semi-truck.”
The announcements came amid a time of trouble for Tesla, with a major loss in the last quarter, problems producing the much-hyped Model 3, and three lawsuits alleging Tesla allowed racist behavior toward workers, a claim the firm denies.
Deposits for Tesla vehicles have become key to the company’s finances, said CFRA analyst Efraim Levy. Hundreds of thousands of people have put down $1,000 to reserve the Model 3, bringing Tesla hundreds of millions of dollars. For the 1,000 “Founders Series” Roadsters, customers must deposit $5,000, then pay the additional $245,000 within 10 days. The standard Roadster requires $5,000 down, then
$45,000 within 10 days, plus another $150,000 upon delivery.
“This is a funding strategy,” Levy said, noting that the 1,000 Founders Series cars alone would bring in $250 million in pre-payments, with every standard Roadster order adding $50,000.
Still, Levy said, Musk’s projects have been “brilliant and disruptive in so many industries,” and he considered the new semi an “impressive and wellthought-out likely disruptor to trucking.”
Carnegie Mellon University engineering professor Costa Samaras, who studies electric vehicles, called the possibility that Tesla could shake up the trucking business “exciting,” but noted the firm’s challenges with getting vehicles to customers. “If it stays a concept car until 2030, then we have a problem,” Samaras said.
Trucking produces a quarter of U.S. transportation-related greenhouse gas emissions, Samaras said. “If we can take that quarter and cut it in half with an all-electric fleet, that’s big news,” Samaras said.
Musk touted the electric truck as 20 percent cheaper to run than a diesel semi, with a 500-mile range on one charge and better performance, including a zeroto-60 time of five seconds,
faster than many sports cars.
“I’ve not heard too many fleet-safety managers excited about the idea of trucks going from zero to 60 in just a few seconds,” said Allen Schaeffer, executive director of the Diesel Technology Forum, an advocacy group for diesel vehicle and engine manufacturers and diesel refiners.
Semi-automated features on Tesla’s truck, such as automatic emergency braking and lane-keeping, and technology to prevent jack-knifing, are also becoming available on standard semis, Schaeffer said.
Electric semitrailers may eventually beat out diesel for regular routes in defined areas, Schaeffer said.
“For the broader bread and butter, the large overthe-road trucks that are picking up fresh produce in California and driving it over here to the East Coast, it seems like a pretty big stretch that diesel would be replaced by anything, especially what we saw last night,” Schaeffer said, referring to Tesla’s unveiling event Thursday night.
New diesel engines have very low emissions, and a number of cities and companies, including San Francisco, Oakland, Disney and UPS, are starting to use “renewable diesel” made from waste materials such as animal fats, Schaeffer said.
Two corporate giants
quickly gave Tesla votes of confidence, with trucking behemoth J.B. Hunt preordering “multiple” semis and retail titan Walmart pre-ordering 15 — five for the U.S. and 10 for Canada.
“We have a long history of testing new technology — including alternative-fuel trucks — and we are excited to be among the first to pilot this new heavy-duty electric vehicle,” Walmart spokesman Ryan Curell said Friday.
“We believe we can learn how this technology performs within our supply chain, as well as how it could help us meet some of our long-term sustainability goals, such as lowering emissions.”
J.B. Hunt said it believed electric trucks with “this new, sustainable technology” will be most useful for short-haul trips.
Carnegie Mellon’s Samaras said the fact that people across the country were glued to Tesla’s livestreamed event Thursday night “said something really special about this moment in technology.”
“We need lots of Teslatype companies in the transportation space,” Samaras said, “if we’re going to make big improvements in the energy and environmental performance of the transportation sector.”