Tesla's (TSLA -3.55%) "Semi Delivery Event" last Thursday evening kicked off with the flair investors and aficionados of the company's electric vehicles (EVs) have come to expect. CEO Elon Musk hitched a ride on to the event's stage on a Tesla Semi, an electric Class 8 semi truck.
The event celebrated the EV pioneer's first delivery of a Semi, which went to food and beverage giant PepsiCo on the prior day. It was held at the company's Nevada production facility, co-hosted by Tesla Semi engineering lead Dan Priestley, and livestreamed on Twitter.
Tesla unveiled a concept Semi in 2017, which is when Pepsi placed an order for 100 trucks. The company had originally planned to begin production in 2019, but delayed it in order to focus on churning out Model 3 sedans.
Here's what investors need to know about this development.
Image source: Tesla.
Why did Tesla launch a heavy-duty truck?
Musk opened the event by talking about why Tesla decided to launch a heavy-duty truck. He said it was to help fulfill the company's mission, which is "to accelerate the advent of sustainable energy."
"Three times the power of any diesel-fueled truck"
Power was the next topic on the evening's agenda, with Musk touting that the Tesla Semi is "fast to accelerate" and "fast to brake." Its power makes the vehicle a "step-change improvement in what it's like to drive a semi truck," he opined.
Priestley added that the Tesla Semi has "three times the power [of] any diesel truck on the road right now." We can't know if this is an accurate statement, but it shouldn't be long before reputable independent entities test the Semi to see if the company's marketing claims hold up.
That said, video of a truck ascending and descending inclines was impressive, with the event's audience cheering when the Tesla Semi passed other trucks while going up inclines.
Range of 500 miles when fully loaded
Along with its power, its efficiency is the other main reason that the Tesla Semi is a "game changer," said Priestley. Both the Semi's power and its 500-mile range are "enabled by our new 1,000-volt powertrain," he explained.
Priestley said that Tesla plans to use this new powertrain in some other vehicles, but didn't expound on that topic.
Musk clarified that the range of 500 miles refers to when the Semi is "fully loaded." In this context, this term refers to an 82,000-pound gross combination weight, which includes the weight of the truck, trailer, and load. This is the maximum allowable weight permitted by the U.S. government for an electric Class 8 truck. That is 2,000 pounds more than allowed for a Class 8 truck powered by fossil fuels, which is an advantage.
We also know from Musk's comments during Tesla's third-quarter earnings call that the 500-mile range assumes the vehicle is traveling on level ground.
As a point of reference, a diesel-powered semi truck can travel up to a maximum of about 1,800 to 2,000 miles before refueling, according to several sources. The exact mileage will vary depending on many variables, including the size of the fuel tanks. These trucks are commonly equipped with two fuel tanks.
Tesla plans to use Semis in its own operations
Along with selling Semis to customers (the price tag was not discussed during the event), Tesla plans to use these trucks to "transport goods between our factories and our suppliers," Priestley said.
Musk added that for testing purposes, one or more Semis are already running "continuously day and night" between the company's locations in Nevada and Fremont, California. This heavy-duty use will "give us a great feedback loop for continuing to improve the product," he said.
"Megachargers" are coming
For efficient charging, Semis require higher-power chargers than the company currently has in its Supercharger network. So beginning next year, Tesla plans to roll out "megachargers" to its Supercharger network. As the name suggests, these chargers have a capacity of 1 megawatt (MW), or 1 million watts. These chargers will reportedly enable the Semi to recover up to 70% of its range in 30 minutes.
In short, the Tesla Semi has the potential to be a big seller, assuming management's marketing claims are accurate and its total cost of ownership compares favorably to diesel trucks over a payback period that potential buyers deem reasonable.
