Morgan Stanley likes the idea of a Tesla semi-truck
That's how Morgan Stanley autos and shared mobility analyst Adam Jonas kicked off a research note published on Thursday.
Tesla has promised to unveil the semi-truck in September. which if we've read Elon Musk's Master Plan, Part Deux correctly will be all-electric and somewhat self-driving -
"With the imminent launch of the Model 3, launch of the gigafactory, development of the Model Y and integration of SolarCity, why does Tesla care about trucking?" Jonas asked.
Good question. I think the semi is indeed a massive and unnecessary distraction. My pet theory is that some Tesla engineers have been working on it, showed Musk their work, and he went bonkers, having a sort of Optimus Prime moment when he saw a great big freakin' Tesla truck! Semis have this effective on grown men - just look at these photos of President Donald Trump behind the wheel of a big rig.
Jonas laid out a fairly compelling case for the Tesla semi in his note.
"We believe the Tesla truck opportunity is real and is a natural market adjacency to the personal transport model, but we don't see it being worth more than 10% of market cap," he wrote adding that:
Then Jonas brought out some tantalizing insight:
All fair enough, at a highly speculative level. But let us now remind ourselves that even if the Tesla semi uses a battery swapping framework, as Jonas suggests it would (thus lowering the purchase or leasing cost), it would still demand the acquisition of an all-new manufacturing capability for the carmaker.
Jonas thinks Tesla can swing it, but remember that Tesla has thus far shown itself to be very good at creating a growth story - hence it's soaring, $50-billionish market cap, bigger than Ford's and on par with GM's - and very bad at actually building vehicles. It still hasn't cracked the 100,000-per-year mark, while Ford and GM assemble that many examples of a single pickup model in a single month.
At this point, with Tesla needing to build and sell nearly a million vehicles annually to even come close to justifying its huge market cap, the semi seems like a cool idea that would interfere with its more mission-critical goal of producing 500,000 Model 3 vehicles by the end of 2018 or the middle of 2019.
Jonas is right that the freight space is ripe for a rethink. But maybe Tesla is the wrong player to be taking on that challenge.
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