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Electric TrucksNews

Battery constraints a drag on the Tesla Semi

Elon Musk: Tesla to build electric delivery van, eventually

Tesla (NASDAQ: TSLA) CEO Elon Musk said constraints on battery production limit the company’s ability to move forward on the long-delayed all electric Tesla Semi truck.

“The main reason we have not accelerated new products —  for example, the Tesla Semi — is we simply don’t have enough cells,” said Musk during the company’s fourth-quarter earnings call on Wednesday.

Production of the Semi will get underway once Tesla addresses those limitations, he implied. 

During an interview at the European Battery Conference in November, Musk said the electric big rig would hit a new range target of 621 miles by using Tesla’s new 4680 cells and new battery pack design.

Scaling the Semi apparently hinges on producing more 4680 cells. On that count, the company is installing capacity to produce 200 gigawatt-hours annually in 2022, Musk said during the earnings call.

Anticipation over the Semi has been running high since last week, when new job listings from Tesla called for employees to work on “Semi-Truck production lines” in Sparks, Nevada, where the company manufactures the batteries.

The postings were for a process technician, process engineer and quality engineering manager.

But if the job notices suggested the Class 8 truck is finally getting underway, Musk during the call dialed back on that proposition. 

“The Semi would use typically five times the number of cells that car would use, but it would not sell for five times what a car would sell for,” he said. “So it would not make sense for us to do the Semi right now.”

Tesla introduced the Semi with much fanfare in 2017, saying production would get underway in 2019 — only to retract that timeline in subsequent guidance announcements.

During Tesla’s first-quarter earnings call last February, Musk said the plan was to put “limited volumes” of its heavy-duty truck on the road in 2020. That didn’t happen either. 

In the company’s third-quarter 2020 financial filing, Tesla said the Semi was “in development,” and that the company had yet to decide where it would be manufactured.

The continued delays have not deterred brands and logistics companies from ordering, collectively, thousands of Semis, with companies such as UPS (UPS) and PepsiCo (NASDAQ: PEP) putting down as much as $20,000 for trucks that are expected to cost between $150,000 and $180,000.

Separately, Musk said during the earnings call that the Semi would likely be the first vehicle in the Tesla line to achieve full autonomy as highway driving is so routinized.

“It’s quite likely,” he said, responding to a question by an investor, adding that Tesla’s self-driving system would require some modification. “There are turns that you could do in a regular car that you cannot do in a Semi. You don’t want to try to parallel park this thing on the street in a city. It needs to know its limitations being a giant truck.”

Musk was also asked if Tesla was going to compete in the red-hot last-mile delivery van market. “Definitely,” he said — once battery challenges are resolved.

Tesla recorded $10.7 billion in revenue and $270 million in net income during the fourth quarter, giving the electric vehicle company its first profitable year.

Related stories:

Analysts: Tesla Semi a ‘distraction’

Elon Musk: Tesla Semi may hit 621 miles of range

Linda Baker, Senior Environment and Technology Reporter

Linda Baker is a FreightWaves senior reporter based in Portland, Oregon. Her beat includes autonomous vehicles, the startup scene, clean trucking, and emissions regulations. Please send tips and story ideas to lbaker@freightwaves.com.

One Comment

  1. I seen pilot saying someone called claiming to be a FBI agent and said I’m tracking Fraley and Schilling trucks and said they’re not allowed on your Lot. Tell the driver your under arrest for driving at Fraley and Schilling.