Green TruckingNews

Tesla Semi’s huge power needs might face surge pricing

Hot weather could increase cost of electricity by 4x

In November, Tesla unveiled its long-awaited Semi truck, and Elon Musk pumped up the adoring crowd with his usual questionable claims about the vehicle’s capabilities and price and the timeline for rolling it out. FreightWaves covered some of the initial skepticism from the transportation and investor community. Since then, a fresh wave of naysayers has spoken out about the economics of electricity that have to be priced in to any estimate of the Tesla Semi’s commercial viability.

Unlike Tesla fanboys who are willing to pay luxury prices for vehicles with subpar build quality, trucking carriers make their acquisition decisions based on total cost of ownership (TCO). The TCO is calculated by taking the upfront cost of the vehicle, and adding the cost-per-mile multiplied by the expected lifetime mileage of the vehicle. Musk claimed that the Tesla Semi would operate at a substantially lower cost-per-mile ($1.26 vs. the $1.51 he quoted as the average for diesel trucks) largely because the truck wouldn’t need diesel fuel. When Musk first tried selling his truck on the basis of those statistics, industry insiders immediately pointed out a problem with the comparison—Musk compared the Tesla Semi’s per-mile cost to an industry average, but the Tesla truck will only be competing against diesels trucks in day operations, which have lower cost-per-mile than OTR trucks. By averaging in the OTR carriers, Musk artificially inflated the cost-per-mile of conventional diesel trucks.

Now it turns out that there’s another big issue with Musk’s figures, this time on the Tesla side. Governments will be forced to make massive investments in energy infrastructure in order to accommodate the demand and generate the power necessary to charge the Semi’s batteries within 30 minutes. John Feddersen, an Oxford University professor who also leads a company called Aurora Energy Research, said that the power needed to charge just one truck battery would be approximately 1,600 KW, equivalent to the energy requirements of 3,000 to 4,000 average houses. Feddersen’s team estimated that in an ‘extreme scenario’ Great Britain would have to construct 16 new nuclear power plants to meet the new 18-gigawatt demand created by electric vehicles.

Who’s going to pay for new power generation and the grids that can move that energy quickly, store it locally, and then quickly release it? SP Energy Networks, one of the main firms in charge of distributing energy in the UK, said that electric vehicles charging during peak daytime hours should be subject to surge pricing. Frank Mitchell, the company’s CEO, told the Financial Times that people charging their cars at peak time should “have to pick up the cost of it.”

“I do think there is a difference between somebody who wants to have a fully controllable high speed [EV] charging unit at their discretion to do with what they want, versus somebody who is happy to have one that is a managed service that allows us to balance the costs to society,” said Mitchell. 

Tesla will have to recalculate the TCO it’s using to sell its Semis if power companies rely on peak surge pricing to build out their capacity and meet the increased, intensifying demand for electricity. In Chicago, an experiment with surge pricing saw the cost of a kilowatt-hour of electricity swing from 8.25 cents to 36.5 cents and back, depending on demand. It’s already well known that the performance of electric car batteries suffers in cold weather (the Tesla Model S can lose half its range in temperatures below freezing); if surge pricing for electricity is widely adopted, it will cost 4 times as much money to charge a Tesla on hot days when everyone’s running their air conditioners. Headwinds and elevation changes will also cut into the 400 mile range that Tesla quoted for its trucks under ideal conditions. The range of use cases where Tesla Semis can compete effectively keeps narrowing.

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John Paul Hampstead, Associate Editor

John Paul writes about current events and economics, especially politics, finance, and commodities, and holds a Ph.D. in English literature from the University of Michigan. In previous lives John Paul studied Shakespeare in London and Buddhism in India, but now he focuses on transportation and logistics in the heart of Freight Alley--Chattanooga. He spends his free time with his wife and daughter herding cats, collecting books, and walking alongside the Tennessee River.

One Comment

  1. "John Feddersen, an Oxford University professor who also leads a company called Aurora Energy Research, said that the power needed to charge just one truck battery would be approximately 1,600 KW, equivalent to the energy requirements of 3,000 to 4,000 average houses."

    Quoting Kilowatts without the hours portion is irresponsible. A 60W light bulb consumes 60 Watts and in 1 hour it will consume 60 watt hours (Wh). Saying that an electric vehicle consumes 1,600 Kilowatts really means nothing. Does it consume that power in 1 hour, 12 hours, 20 days, a year, what? The power consumed by 3,000-4,000 houses you say, is that in 1 hour, 12 hours, 20 days, a year, what? You can easily mismatch do make your point.

    I’m not saying this this whole article is now bunk, I just want people to think for themselves. Presenting only a few numbers and not explaining methodology makes people think they understand enough to have strong opinions. Do the math, question everything, and ALWAYS follow the money.

  2. I decided I don’t want to leave things so open ended as in my first post. Let’s look at real world numbers:

    A 1 horsepower combustion engine’s output is equivalent to a 745.7W Electric motor.
    The average tractor trailer is rated at about 450 hp. For an electric drive system to displace a conventional internal combustion engine, the electric drive system would need to be sized to deliver:
    450hp x 745.7W/hp = 335,565W or 335.565 kW.

    If we assume that the truck is running at 100% power consumption – think pulling a full load up a never ending hill – the electric motor(s) will need 335.565 kW of electricity to run continuously.

    A 400 mile range covered at a rate of 70mph will take ~5.7Hrs.

    335.565 kW x 5.7h = 1,912 kWh of stored battery power to get you through one 400 mile trip.

    According to the U.S. Energy Information Administration: "In 2016, the average annual electricity consumption for a U.S. residential utility customer was 10,766 kilowatthours (kWh), an average of 897 kWh per month."

    10,766 kWh/yr x (1 yr / 365 days) = 29.5 kWh/day to run the avg American home.

    One electrified tractor trailer requires 1,912 kWh to travel 400 miles. If we divide this power by the daily consumption of the average American home we get:

    1,912 kWh / 29.5 kWh/day = ~65 Days. This means that to completely recharge one electric tractor trailer it would require to power of one home for 65 days. WOW! That is a lot of juice.

    However, where do we get the 3,000-4,000 homes figure? If we assume that the battery pack on our electrified truck can fully recharge in just 1 hr, that would mean we would need to pull 1,912 kW of power from the grid for an hour. A home that uses 29.5 kWh/day really uses 29.5 kWh/day x (1 day / 24hr) = ~1.23 kW on an hourly basis or 1.23 kWh.

    Again, our electrified truck requires 1,912 kWh of stored power to drive 400 miles (remember this is also an overstatement because we assumed that the truck would be using all 450 horsepower throughout the entire trip duration and NOT accounting for any regen braking that might occur). Divide this by hourly use of just one home and we get 1,912 kWh / 1.23kWh/home = the power to run 1,554 homes for 1 hour. Still not close to the 3,000-4,000 home claim.

    I’m NOT saying that the 3,000-4,000 home claim is wrong. Maybe it’s exactly on the money but it’s hard to say and if anything it seems inflammatory. I’d like to know who funded the research completed by the Oxford University professor.