Tesla semi-production can be suspended till the corporate can manufacture its personal batteries
Elon Musk, Tesla CEO, shows the Tesla Semi as he introduces the company's new electric tractor-trailer during a presentation on November 16, 2017 in Hawthorne, California, United States.
Alexandria saga | Reuters
Tesla CEO Elon Musk said during the company's earnings call that series production of its Class 8 truck, the Tesla Semi, will be suspended until Tesla can produce high volumes of its 4,680 battery cells.
The cells that Tesla designed and shown to shareholders at a battery day presentation in September 2020 are large, tabless lithium-ion cells that the company makes at its pilot battery factory in Fremont, California. The company announced in a fourth quarter earnings update that it will deliver its first Semi by the end of 2021.
"Prototypes are easy, production is very difficult to scale," complained the CEO.
When Tesla first unveiled its semi-trucks in 2017, Musk announced that they would be delivered to customers in 2019. In April last year, the company announced that it would postpone semi-production until this year.
Tesla has taken numerous reservations for the Semi from well-known customers. Anheuser-Busch, DHL Group, PepsiCo, Pride Group and Walmart have all spent money on Tesla class 8 battery-electric trucks.
Tesla has also used semi-prototypes in a marketing stunt to deliver cars to customers. Recently, job vacancies were posted for employees to work on tractor unit production lines at their battery plant outside of Reno, Nevada.
Musk said of the semi, specifically:
“The main reason we haven't accelerated new products – like Tesla Semi, for example – is that we just don't have enough cells for them. If we were to do the Semi now, we could easily go into production with the Semi, but we don't have enough cells for it right now. We'll have enough cells for Semi when we produce the Tesla 4680 in volume. "
"Basically, we don't see any problems in creating a compelling long-haul truck with batteries other than the cell supply," said Musk.
Jerome Guillen, President of Automotive at Tesla, said on the conference call that Tesla's Semi is using the same parts that are found in the company's sedans and SUVs today to enable driver assistance features that Tesla is marketing as autopilot and full self driving options . "I look forward to having more on the road soon," he said.
According to the CEO, the Semi would need five times the number of lithium-ion battery cells a car would use today, but the company couldn't sell it for five times what it can sell for a car. So Musk said, "It wouldn't make sense for us to do the semi, but it will make perfect sense for us to do it once we can address cell production restrictions. The same would apply to a van." ""
In the USA, high demand for delivery vans and other light commercial vehicles is expected in the coming years. One reason is President Biden's Buy America plan to replace the federal government's fleet of internal combustion vehicles with cleaner, quieter electrics.
According to the latest available data from the General Services Agency, the federal fleet includes more than 400,000 trucks, a category that includes light pickups and vans. Tesla competitors like GM, Daimler, Rivian and others are already developing and selling battery-electric vans in some cases.
"I think Tesla will definitely build an electric van at some point," said Musk. "The thing to note is that battery cell performance is inherently limited. If you're not involved in manufacturing it, it's really hard to gauge how difficult it is to scale production. It's the hardest thing in the world!"