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How the Tesla Semi could affect the Solar Industry in 2018 and 2019

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Elon Musk unveils the Tesla Semi

Tesla recently unveiled its Tesla Semi, an electric-powered Semi Truck with a range of 500 miles per charge. It weighs 80,000 lbs and claims to save you $200,000 in the semi's lifespan (1 million miles). Musk added that it would be 25 cents cheaper in terms of fuel cost per mile than diesel semis. 


Walmart preorders 15 Tesla Semi

Clearly targeted toward the longer range market sleeper semi than the shorter range day cab semi, Tesla seems to have successfully earned the business of many companies including Loblaw, J.B. Hunt, Firm Ryder and retail giant Walmart. 

Despite the belief that this unveiling is part of Musk's attempt to distract investors from Tesla troubles many remain optimistic. Regardless of the company's eventually success/demise, the potential effects of Tesla's innovations in the future of many industry and the future of the world are undoubtedly undeniable. 


Solar Powered Semi will be a huge shift

Serving as the circulatory system of the world economy the trucking industry would have significant multi-industry effects especially in the diesel and solar industry.

The diesel fuel industry earned $105 billion worth of revenue from the trucking industry in 2015. If EV semi gain traction the propagation of electric fuel stations will increase while boosting demand for commercial carport/fuel station solar installations while dealing a significant blow to diesel industry.

This, however, is merely wishful thinking if Tesla Semi does not offer a good enough value proposition to gain a significant market share in the long range semi truck industry. 


To fully understand the viability of the Tesla Semi, we need to look at the numbers:


Tesla semi may be cheaper to operate during its lifespan - The average cost of a brand new diesel semi is $150,000 while the Tesla Semi is estimated to be $50,000 more expensive. Despite the big difference in initial cost, the Tesla Semi, claiming to be 25 cents cheaper to fuel than a diesel semi, would save a lot more in its lifespan in terms of fuel. Battery replacements and maintenance may cost more, however. Tesla Semi ROI source



Tesla Semi's heavy battery cuts load capacity that could be used to generate revenue - The main problem for the Tesla Semi would be its gigantic load weight. According to estimations by Donn Bailey from seekingalpha, the battery required to power such a hauling beast would weigh around 15 tons in comparison to the diesel engine's 5 ton drivetrain.

Bailey further indicated that an average of 21-28% of revenue would be lost due to the loss in useful load capacity meaning it would take more trucks and/or more trips to deliver the same amount of load.


Further Complications of an Electric Drivetrain

Many analyst have stated that decrease in useful load and the 500 mile range of the battery in comparison to the average 1500 mile range of a diesel semi will mean the operator will also need additional recharging trips. 

This in conjunction with the average 21-28% in lost revenue means Musk's claimed 20% operations cost savings has already been swallowed by the tiny details associated in a real world scenario. 


Market Segment and Opportunity Cost

Despite Tesla Semi's projected net negative cost, the long forgotten stepchild of costs analysis, opportunity cost, could be its redeeming grace. 

Based on its marketing, pricing and specs, it is obvious that Tesla Semi is not aimed towards small business owners. Musk stated that Tesla Semi would also be capable of operating in fleet mode. In this mode several trucks are driven by one driver while the other trucks function as mobile office spaces. In this format, the fuel per mile savings double according to Tesla.

Today technology is advancing at an alarming rate, hardware that you purchase today may be obsolete the next year.

The release of the Tesla Semi could mark the start of technology race in the trucking industry. This means the opportunity cost of purchasing an old generation model such as a diesel engine today could be similar to purchasing a Nokia right before the smart phone race began. 


How It Will Affect The Solar Industry

Currently bracing for the dreaded culmination of the  Solar Trade 201 case, the solar industry is finding ways to prepare for the inevitable solar tariff that will drive up operational costs for residential and commercial solar installers. As of today, the ITC recommendations have been sent to Trump.

Many companies are rallying against solar tariff. Fortune Energy itself has released the Free Solar Design program to help its residential and commercial installers drive operational costs down by purchasing full turnkey. Others have overbought stock to last them through 2018 without any additional tariff cost. However, these solutions can only work for so long until the full effects of the tariff is felt all throughout the industry. 

The Tesla Semi is scheduled to be in production 2019. It is the same year industry experts predict will start showing the harmful effects of the solar tariff such as the  projected loss of 88,000 solar jobs. If the Tesla Semi becomes well received, it could potentially bolster the commercial solar installation landscape and create new solar jobs.

For many of us, the fight to keep solar trending positive is not just a business decision, but a practical decision. A recent "warning to humanity," petitioned by 15,000 scientists from 184 countries, shows the importance of fostering cross-industry renewable energy solutions. The Tesla Semi is certainly a step in the right direction for the trucking industry.

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Note: The above estimations in this article are projections and are not the actual numbers released by Tesla, please take it with a grain of salt until official numbers are released.


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