The 2022 Tesla Semi Update Is Here!
Let’s talk about the Tesla Semi. It’s been a while right? What’s been going on with this thing? Well, there definitely has been some progress from Tesla in getting this heavy duty electric truck into the production phase. But there has also been yet another, in a long line, of what I guess we could call ‘re-prioritizations’ in the Tesla product roadmap that is going to keep the Semi largely on the sidelines for at least another year.
But in the meantime, there is still a really important conversation to be had about the state of the trucking industry, and where electrification and autonomy fit into that picture. Even if it does come 4 or even 5 years late, the Semi Truck is easily one of the most significant products that Tesla has ever developed - we’ll get into some reasons why that is.
2022 Tesla Semi Update
OK, so here’s what we know about the Tesla Semi as of right now - There has been limited production of the vehicle happening near Tesla’s GigaFactory in Nevada, this began at some point during the fourth quarter of 2021. And this was proven in December 2021 in a drone video released by Sawyer Merritt that clearly shows a Semi driving around the factory location. We’ve also seen Tesla install a handful of Mega Charger stations at that facility that are specifically for the purpose of fast charging the massive battery packs inside the Semi.
These same Mega Charger stations have also been installed at the Frito-Lay facility in Modesto California, photos were released on January 29th 2022 that show at least two charging stations looking finished and ready to go. We know that Frito-Lay is at the top of the list to receive the first batch of 15 road-ready Tesla Semis. And the rumour mill was set into high gear by comments from the company CEO in November, saying that he expected delivery of the trucks by the end of the year. Obviously that was not the case. But we do see progress at the very least.
It’s hard to say exactly how many trucks Tesla have made so far, we can reasonably say that there are at least 4 of them built recently, thanks to this image released by Tesla as part of their 2021 earnings report, which was published at the end of January. This could be a rendering for sure, though it looks pretty real to me. And that’s backed up by some amateur photos released on March 23rd that show at least two, and probably three, white Tesla Semis in Palo Alto California. And these would be in addition to the original grey prototype, and that red one that we saw actually hauling around Model 3’s and Model Y’s in the summer of 2020.
So, I feel like that’s at least enough recent evidence to debunk the notion that the Tesla Semi is just vaporware - like that it’s all just a big hoax to run up stock prices or whatever. Tesla is clearly spending a ton of money and resources on this project right now.
As for a clear production timeline? According to Elon Musk himself, we shouldn’t expect to see anything significant in terms of Semi deliveries until next year, 2023. And the reason that he put forward was basically the same reason for delaying the Cybertruck - Tesla needed to focus on volume production this year to start making up for the massive imbalance in their vehicle supply and demand equation. The Model Y is entirely too popular for its own good, Tesla is fighting a losing battle trying to keep up with demand for these things. Model 3 is still massively popular, but Model Y has overtaken as the top selling electric car in 2022.
So Tesla is not going to do anything with their product development that will slow down production of the Model Y. Elon said that by introducing a new product into the fold, they would actually reduce the overall number of vehicles the company could deliver in a year. And right now, that’s not a sacrifice he is willing to make. So, the first thing they need to do is bring Model Y to volume production at Giga Texas - and only after that can they turn attention to building out production lines for the Semi and the Cybertruck.
Why Trucking Needs Full Self Driving
I want to talk about an article that was published recently by the Automotive News, where they write about how autonomous driving will become essential for long haul trucking to remain a sustainable industry. And by extension, they identify the biggest opportunity for the Tesla Semi in this market.
Do you remember during the Tesla Bot presentation last summer when Elon Musk said he wanted robots to take over human jobs that are boring, repetitive and dangerous? Long haul trucking checks all of those boxes and it’s not even a worthwhile job to have for the employee. So, your average long hauler spends 300 days per year on the road, driving in more or less of a straight line down interstate highways night and day and they take home a salary of about $47,000 USD per year. Kinda brutal. The short haul routes are much more difficult to drive, but they pay much better and attract the more experienced truckers. Not surprisingly, the long-haul workforce tends to turn over entirely once every 12 months or so.
At the moment, the long haul trucking industry is short about 61,000 drivers, according to the American Trucking Associations. Now, obviously there are a number of factors at play, some of which have sparked a small faction of truckers to form convoys and air their grievances in a very loud and public fashion. But the heart of the matter remains that this is a boring, repetitive and dangerous job with grueling working hours that doesn’t even pay very well, and people just don’t want to do it, at least not for any longer than they have to.
The driver shortage is so bad that American trucking companies are trying to import drivers from other countries to fill the gap. Truck lobby is even seeking to lower the minimum age for interstate drivers to 18 from 21. So when it comes to piloting an 80,000lbs machine going 75 miles an hour, the choice might come to a teenager, or a robot.
We obviously can’t afford to keep trying to run the economy with a handicapped supply chain. And we’ve seen labor shortages affecting virtually every industry in the past 6 months, so this isn’t even a problem that’s unique to trucking. In a labor shortage, the power goes into the hands of the worker, they’re no longer forced into a job that they don’t wanna do out of necessity, they have a choice. Which is a great thing for the people, but it’s a bad thing for an economy that was built on a foundation of cheap labor. And if we believe Elon Musk in his fear of population decline and record low birth rates, then we can expect that this problem will never get better, only worse. Then that leaves us with automation and autonomous vehicles as the only way out of a catastrophe.
And that’s the real significance of the Tesla Semi, the truck itself is great, it will probably be a very efficient platform that will save companies a bunch of money on fuel and maintenance and it will help to reduce our global emissions problems. Did you know that heavy trucking accounts for about 1 percent of all vehicles on the road, while producing about 17% of all vehicle pollution? That’s obviously bad and needs to change. But it’s Tesla proprietary Full Self Driving software that comes inside each Semi that will be the real game changer.
Even in its early stages, Full Self Driving is almost ready to go fully autonomous on the highways. So by the time the Semi really comes out in high volume, it might be ready to take over long haul routes with no driver at all. Instead of having to sleep for 8 hours a day, the Tesla would just need to charge for half an hour every 300 miles or so. And before too long, that 60,000 person wide gap in the labor force can start being filled by autonomous trucks.
Given enough time, and enough training with human drivers behind the wheel, maybe Full Self Driving can even figure out how to drive a Semi truck and trailer on a short haul trucking route that takes it through urban centers and city streets. That’s not likely to happen any time soon, but it can happen eventually.
The Electric Trucking Competition
Let’s talk about the competition in this field. Because way back in 2017 when Elon unveiled the Tesla Semi, it was a radical, unprecedented idea to make anything that large and have it run fully electric. For the time, it was a breakthrough. Fast forward 5 years, and there are plenty of other electric transport trucks out there, it’s not even a particularly difficult thing to make with modern battery technology.
People are still trying to claim that electric semi trucks are stupid because batteries are too heavy. And they are. But so is the cast iron diesel engine, 18 gear transmission, full gas tank and gigantic industrial drive train that the batteries and motors are replacing. Tesla motors only weigh like 60lbs. And they’ve already figured out how to get more range with fewer batteries in new vehicles like the Model S. They'll get even better at it with the new 4680 cell and structural pack. It’s not a big deal.
Even Nikola can do it. Yeah, the electric vehicle company that we all spent the past year talking smack about actually beat Tesla to market with an electric semi truck. At an investor presentation on March 24th, Nikola announced that they had already begun production of the Tre semi truck. They’ve even delivered 18 of them so far and an additional 22 are awaiting final checks and commission before delivery. Nikola has a pretty modest goal of delivering between 300 and 500 of these semi trucks this year. The Tre is built on a dedicated electric platform, it’s not just a regular truck with electric stuff bolted on. And Nikola is estimating 350 miles of range per charge with fast charging to 80% in 100 minutes. So, that’s actually pretty awesome. We definitely participated in kicking this company while they were down, so it’s only right to hype them up when they do something good.
The interesting point about the Nikola Tre is that it is a battery electric vehicle - that company was always dead set on hydrogen fuel cells as their power source. And it looks like they are still hydrogen believers - Nikola are saying that the battery powered Tre is just like the base model, and that a fuel cell version with 500 miles is coming by late in 2023. Then at some point in 2025, they plan a ‘next-generation’ fuel cell vehicle semi that will top out at 900 miles of range.
Nikola has not mentioned anything about autonomous vehicle technology or fully driverless trucks, however. And that’s why I think Tesla can still be the real game changer in this industry, even if they do end up coming late to the party. And of course we can talk about Volvo, who are making all kinds of electric semi trucks right now, and Chinese companies who are doing it too. But none of them have the artificial intelligence and robotics capabilities that Tesla does. No one else is even close in that regard. And that’s why I thought it was important to bring in that whole bit about driver shortages in trucking - you can have the most amazing hydrogen powered super truck with a thousand miles of range, but if there’s no one willing to drive it, and it can’t drive itself… Then what do you really have? What is the value of that product if it has no function?
