Will the Freightliner eCascadia kill the Tesla Semi?

 President and CEO of Daimler Trucks NA Roger Nielsen introduces the Freightliner eCascadia. ( Photo: FreightWaves )

President and CEO of Daimler Trucks NA Roger Nielsen introduces the Freightliner eCascadia. (Photo: FreightWaves)

Yesterday at its Portland, Oregon, North America headquarters, Daimler AG announced the commencement of a vast research and development project worth more than $2.9B and including a facility in Portland dedicated to autonomous trucks.

The biggest news, though, was the launch of two potential Tesla Semi-killers: Freightliner’s new battery-electric eCascadia and eM2 trucks. The eCascadia, pictured above, is intended to be a heavy-duty highway truck, that can move an 80,000 lb gross combined weight about 250 miles between charges. Daimler said the eCascadia would be best suited for regional distribution and port shipment work—lanes without range anxiety, where a truck can return to its home motor pool and recharge each night. The medium-duty eM2, with a range of 230 miles, has been marketed by Daimler for local distribution, food and beverage delivery, and ‘last mile’ logistics: this vehicle is meant to excel and find efficiencies in the constant stop-start urban congestion patterns that frustrate diesel fleets.

“We are the undisputed global leader of the trucking industry and we intend to remain in that position with electric trucks and buses,” Daimler Trucks chief Martin Daum said in a statement.

Daimler will deliver 30 electric trucks in 2018 to customers for field testing, and said that it expects the eCascadia and eM2 to enter mass production in 2021. As FreightWaves has already reported, Tesla promised to begin production of its electric Semi in 2019, but there are widespread doubts about that project’s feasibility and financing

The problem with Tesla’s Semi launch is that the automaker is burning cash by building personal vehicles—Elon Musk doesn’t have a business division that’s actually generating the income that could finance the research and development and additional production capacity necessary to produce a commercial vehicle like the Semi. The incumbent OEMs who have entered the electric truck space, including Daimler, Volvo, and Navistar, all have profitable manufacturing operations that are feeding billions of dollars of cash into experimental electric vehicles: Tesla is cash-poor, and has yet to turn a profit making mass-market sedans.

Besides Tesla, there is another California upstart entering the electric truck arena: Thor Trucks, based in Los Angeles, whom we’ve covered before. Thor’s philosophy of working with existing OEMs and component manufacturers—rather than literally re-inventing the wheel, as Tesla has chosen to do—makes their truck, in our mind, a less risky proposition than the Tesla Semi. Thor has a handful of prototypes out in the field being tested by customers now, and plans to start serious production of its trucks in 2019, after it closes its Series A funding round later this summer. 

At the moment, though, Daimler dominates the roughly $39B North American heavy duty trucking market with 40% market share. 

In some sense, though, Tesla has already won: Elon Musk succeeded in pointing the automotive and transportation industry toward electric vehicles. When Musk founded Tesla 15 years ago, electric vehicles were a far-fetched pipe dream, but today, the most hard-nosed, profit-driven commercial vehicle manufacturers see them as an inevitability. Back in February, our staff writer Chad Prevost drew a parallel between Elon Musk and Henry Ford: one of the lesser-known facts about Ford is that his first two automobile companies failed.

If Tesla actually does succeed in producing its Semi—and we don’t know where that will be, given the Fremont plant is already at capacity—it will be truly fascinating to see whether the notoriously conservative enterprise carriers pick the well-known electric Freightliner with modest specs or the untested Tesla Semi’s aggressive promises?

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