Tesla Semi in short supply for PepsiCo; other customers use competing EV trucks
Key Tesla customer PepsiCo made initial payments for 100 Tesla Semis in 2017, but according to the food-and-drinks maker and one of its executives, PepsiCo has only 36 of Tesla's promised 100 electric trucks.
Tesla - it wasn't Musk way back then - started manufacturing EV cars before the dams broke. Those first Teslas weren't very good. The engineering was so-so, and the manufacturing was downright poor.
But Tesla was almost alone, and got its act together before the other manufacturers arrived.
EV trucks? Not so much.
S E E D E D C O N T E N T
NEW YORK — Key Tesla customer PepsiCo made initial payments for 100 Tesla Semis in 2017, intending to use the electric-truck fleet to haul its Cheetos, Lays potato chips and Pepsi soda pop to retailers.
But according to the food-and-drinks maker and one of its executives with knowledge of the deal, PepsiCo was using only 36 of Tesla's promised 100 electric trucks as of this month.
The shortfall, which hasn't been previously disclosed, lays bare the challenges for Tesla as it seeks to become a high-volume player in the truck-manufacturing business. Other would-be Tesla customers including food distributor Sysco, UPS and Walmart Canada continue to wait for Tesla Semi trucks and are turning to rival electric-truck makers.
The struggles of shipping enough Semis come at a bad time for Tesla, which has seen growth for its consumer electric vehicles slow, forcing it to cut prices and hurt margins. In addition, Reuters reported this month that Tesla had decided to cancel its long-promised inexpensive car that investors had hoped would drive further growth.
Diesel-powered 18-wheelers are a major source of pollution. As companies pledge to slash their greenhouse gas emissions, the proposition for Tesla is clear.
"People might wonder why build a semi truck?" Musk said at the carmaker's gigafactory in Sparks, Nevada, in late 2022, when Tesla delivered the Semis to PepsiCo. "It's 20% of U.S. vehicle emissions."
Under the Biden administration, companies using electric trucks qualify for large subsidies to offset their purchases. PepsiCo secured over $20 million in government grants to cover the cost of 32 of the Semis, plus federal subsidies of $40,000 per vehicle.
Tesla, which will report quarterly results on Tuesday, did not return a request for comment.
A PepsiCo spokesperson said in a statement that the company's plans for the Semis can shift when technology and the need to establish infrastructure is involved.
The soda and snack producer was the first of Corporate America to take delivery of any of Tesla's highly-anticipated Semi trucks. "The 100 (Tesla Semis) we have a deposit on, we'll get those out in '23 for sure," Mike O'Connell, PepsiCo's vice president of supply chain, told Reuters at the time.
But, as of this month, PepsiCo was "focused on best leveraging the 36 (Tesla Semi) vehicles that are currently in our fleet," a spokesperson told Reuters in early April. That's the same number PepsiCo first started with when it began using the trucks to transport goods from its Modesto food manufacturing plant and Sacramento bottling site, PepsiCo executives said.
Tesla has been looking to build a truck-making business for years.
Tesla had said it would have the Semi in production by 2019. In October 2022, Musk told investors that his goal was to make 50,000 Semis in 2024. Tesla finally unveiled the Tesla Semi truck in late 2022.
But in June 2023, Musk said at an energy conference that "there just weren't enough batteries" for Tesla to reach "volume production" of the truck, without quantifying how many Semis that would be. He said Tesla would reach volume production in 2024 "as the battery problem gets solved."
Svein Sollie, the transportation director at ASKO Norway, the logistical arm of Norway's largest food retailer NorgesGruppen, used his personal credit card to put down an initial deposit on 10 of the Tesla Semis in 2017 but has not received any.
"We are not happy with the situation at Tesla," Sollie said. "(It's) almost seven years now, it's a long time to wait."
UPS reserved 125 Tesla Semi tucks in 2017, one of Tesla's biggest orders at the time. A spokesperson for the package delivery company told Reuters on April 16 that it is "working closely with Tesla to determine a date for us to take delivery of the trucks," but declined to provide additional details.
Meanwhile, UPS, Walmart Canada, Sysco and Schneider National, a transportation company that works for PepsiCo's Frito-Lay, said they are turning to Daimler Truck, maker of the Freightliner eCascadia. All four companies said they had begun to put dozens of eCascadia electric big rigs on the road.
The eCascadia's range is around 230 miles, while the Tesla Semi can go about 500 miles. Schneider said it uses nearly 100 eCascadia trucks to haul goods including PepsiCo's Frito-Lay products.
Daimler Truck North America said the eCascadia is used in more than 55 separate companies' fleets.
To be sure, Tesla has its own fleet of close to 100 Semi trucks that are traveling between its factories in Fremont, California and Sparks, Tesla executive Lars Moravy said on reality show Jay Leno's Garage in December.
In addition, logistics provider Martin Brower has said on its website that it used two Tesla Semis to make deliveries to its restaurant customers earlier this year, as part of a pilot. It did not respond to additional requests for comment.
In Tesla's quarterly earnings call on Jan. 24 Andrew Baglino, an executive who has since left the company, said Tesla recently began expanding its plant in Nevada to manufacture the Semi. Musk said in March that it would "make sense to also build the Semi in Europe" at the company's factory outside of Berlin, according to local news reports.
Pepsi Chief Sustainability Officer Jim Andrew said in a recent interview with Reuters that PepsiCo was working on building out the infrastructure to support an electric fleet, including employees who can service the vehicles and power grids strong enough to charge them.
"You're talking about a system," Andrew said. "All of those things have to happen before we can electrify the fleet."
A PepsiCo spokesperson said the company would be deploying more electric vehicles from a range of manufactures as they are available.
PepsiCo investor Green Century Capital Management has reservations about the company's time table for rolling out the Semis.
"The fact they're running behind schedule is concerning," said Andrea Ranger, a shareholder advocate at Green Century. The investment firm has followed PepsiCo's use of electric vehicles and is pushing the company to consider its impacts on biodiversity at its annual meeting in May.
In Europe, ASKO Norway is using electric semis from Scania and Volvo while it waits for Tesla, according to Sollie. He said Tesla told him that Tesla is prioritizing Semi deliveries to Pepsi and other U.S. customers.
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It's interesting. These rigs are very expensive... but the bean-counters are smiling. I wonder if they know something the average joe doesn't...
The average Joe knows these EV semis will only be good for short city delivery routes.
For OTR trips of any duration and distance they wouldn't be feasible. Lack of charging stations and taking too much time to charge.
The fate of e-semis will probably be similar to that of EV busses.
Electric buses are sitting unused in cities across the US; here's why (msn.com)
Electric buses get billions in federal aid. A top maker just went bankrupt. (msn.com)
The average joe is wrong... which you would know if you bothered to read the seed before posting about buses. The seed is about trucks.
I did read the seed, and was simply stating an opinion that electric trucks will end up being as inefficient and in the shop for repairs as often as e-busses are. I'm not buying what you're trying to sell to us about EV's.
IF ev semis were to ever take off for OTR, having held a CDL for 30 years now I don't see it happening even in the next 30 years, they wouldn't be able to rely on charging like a passenger car. Delivery and pick up time tables won't allow for over night charging
My thought is they would have to rely on a battery swap out option, simply swap out a used for a charged, so there is an added cost passed to the consumer.
The next issue with that will be where to place these swap out stations, and if the permits needed to even build one would be obtainable. I seriously doubt many communities will welcome a storage of toxic batteries very close, I even doubt counties would be accepting of them with current EPA regulations on such matters.
The EV semi will likely be limited to simple inner city and extremely short haul day trips locally , if at all.
They're semis, for pity's sake! Don't swap the battery, swap the trailer. Then the tractor can recharge.
Autonomous driving is much simpler on highways than on city streets. It's easy to imagine the bean-counters drooling at the prospect of autonomous EV semis moving trailers from one logistics point to the next, and then EV vans (with drivers) for the last mile.
Do you think the Teamsters are going to nicely accept self driving trucks taking their jobs?
Probably not. Automating tasks that have been done by people has been the (sad) story of industry for a long time.
Gonna be interesting...
Sorry, but I am really , really REALLY trying not to hurt your feelings by laughing in your face now.
You just made a really big jump there, from electric semis to autonomous semis .
I will just stick with the EV portion because few if any states are going to allow autonomous.infrastructure costs along make that prohibitive even with the government footing the whole bill. Then you will have to deal with the weather screwing up those systems.
Ok ,, your solution is swap out the tractor portion while the dead ones charging , you would also have to swap out the driver, see in OTR /cross country , the driver lives in the tractor ,everything changes of cloths food and many other things are in the tractor, driver's won't move everything from one tractor to the next for the duration of a battery charge. Just not going to happen in OTR/ cross country driving. That not even mentioning that a good majority of those types of drivers drive in teams , they are after all paid by mile driven in most cases , old saying is you ain't earning if the wheels aren't turning.
I'm going to remind you that right now the OTR driving industry is short 60k drivers, those that are qualified and can pass the dot drug tests.
And shortly they will be short 60001, I just put in my papers for retirement Friday.
What you have is 3 lists, a wish list ,those things you want done, a sec list, those things that might be able to be done, and a reality list, those things that can currently be done .
That reality list is what knocks both those other lists out of consideration after factoring in everything involved.
Most otr drivers are not teamsters any way , there is a lot of company drivers , a few owner operators some contract as well. But O/O and gypsy gig contract drivers are slowly being pushed out.
Try pulling this stunt and you will look back fondly to the pandemic supply train issues as a walk in the park on a sunny day.
If it isn't broke don't try and fix it.
I see no point in continuing this.
There likely isn't.
Because reality of the moment will always stand in the way of wishes and desires.
I would suggest though , in the future, at least understand how something currently works before trying to suggest outlandish and ridiculous non working solutions.
I mean come on , I at least attempted to solve the range issue with something that would feasably be workable to those in the profession.
Your suggestion of trading tractors and not battery's is unfeasible as well as unworkable under the current conditions those drivers work.
The only thing I find interesting about ev currently is waiting to see what happens when those proponents of it find out it won't work , and causes more problems than it solves.
I almost feel sorry for those that are heavily invested in such a venture, especially if their retirement counts on it.
Bean counters don't always know everything either. They deal strictly with numbers and the such.
Here is a little story.
New accountant was hired with the instruction to save money.
Driver turns in his weekly paperwork. Monday comes and the bean counter calls the driver in with questions about his route. He tells the driver he notices his route takes him 3 miles and about 6 mins longer than his route mapping program says is the shortest route, pretty much accuses the driver of padding his pay. And tells the driver that this is the only authorized route he has to take handing him a map and directions.
Driver says as long as the company re emburses expenses he doesn't mind.
Friday rolls in , the driver hands in the paperwork, the pencil pusher immediately starts to tally things up. He notices there is a note in the expenses box for $120.and he immediately flips out and questions it asking what was going on.
Driver told him , that he stayed on the authorized route as told, but unfortunately the accountants mapping program failed to tell him there was a toll bridge on the route that costs $12 per round trip. So you see, whatever you thought you saved from 6 miles and 12 mins, per day ended up costing you $120 in tolls, basically stepping over dollars to pick up dimes. The accountant was not happy and started to protest. At that point the office/depot manager who had been listening , looked at both and stonefaced told the accountant to pay the driver, and from that point forward to never mess with his driver's.
I think you can figure out how this applies.
Numbers may not lie, until they do and reality slaps them in the face.