Approximately two weeks ago, we predicted that the Tesla Semi would not come out in 2021. This was not based on any confirmation, but a hunch that the streak of delaying the Semi’s release would continue. While the Tesla Semi is still slated for a 2021 release according to the company, it has hit a roadblock regarding the opportunity cost of its battery cell supply.
Tesla’s fuel batteries are made out of many, as in tens of thousands (if not hundreds of thousands), of smaller batteries working in unison. While Tesla has kept its trade secrets mostly under wraps, it is not an insane assumption to believe that these battery cells comprise the single largest line item in producing a vehicle.
Because of the weight and consistent use of a Tesla Semi, the Tesla Semi would use five times as many fuel cells as a four-wheel automobile, but would not sell at a price with a similar profit margin. Hypothetically, why spend $100,000 making a $150,000 semi truck when you can use that same $100,000 to make five cars that retail for $35,000 each and make another $25,000 in profit?
As the production of electric cells decreases over time, Tesla Motors may find it makes more financial sense to use the cells in less profitable projects to increase total net income.
When asked about the Tesla Semi, Elon Musk said, “…it will absolutely make sense for us to do it as soon as we can address the cell production constraint.”
Elon Musk hopes to get the first Tesla Semis assembled for public use by the end of 2021, but the reduced economic incentive, combined with the plans to produce a more energy-dense battery system into the Tesla Semi to give it a longer range, means that time is not on Tesla Motors’ side to reach this goal.
One considered the frontrunner of the electric semi-truck race, Tesla is giving up ground in its chances of being first to market. Which company crosses that finish line first is anyone’s guess.
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