Hyperdrive Each day: Tesla’s Semi is out of batteries, dropping its champion

Welcome to the daily Hyperdrive briefing that will decipher the revolution that is reshaping the automotive world, from electric vehicles to self-driving cars and beyond.

Short messages

  • Toyota says it’s too early to just build electric cars.
  • GM-backed Cruise begins production of its autonomous shuttle.
  • Stellantis thinks about the production of electric vehicles in a southern Italian plant.

Will Tesla ever do the semi?

In November 2017, Tesla unveiled its all-electric semi-truck at a late-night event near Los Angeles. It was an implementation of the updated master plan that CEO Elon Musk had drafted a year earlier and in which he promised to expand the company’s product range to “cover the main forms of land transport”.

While electric cars are on everyone’s lips, the move to electrify large oil rigs is badly needed in Tesla’s home state of California, where heavy trucks make up a large part of the state’s emissions profile and air quality and asthma rates near container ports have long been a major issue public health.

So, almost a full five years after Master Plan, Part Deux, what is the status of Tesla’s semi-program? There are a few prototypes out there, but the company doesn’t seem close to mass production.

Musk has suggested that the Semi be essentially put on hold until Tesla can manufacture or source a new type of battery cell in high volume. The 4680 cells were one of the big highlights of Tesla’s “Battery Day” last fall. While the company plans to both manufacture them in-house and source them from longtime supplier Panasonic, they are still a long way from being ready for prime time.

As my colleagues in Japan reported in April, the thicker and more voluminous cells, named after their dimensions of 46 millimeters in diameter and 80 millimeters in height, are still largely unproven. Some experts even doubt whether mass production is possible.

During Tesla’s fourth quarter earnings conference call in January, Musk said the Semi “would normally use five times the number of cells a car would use, but it wouldn’t sell for five times the price of a car.”

“It wouldn’t make sense for us to do the semi right now, but it will make perfect sense to do it once we can address the cell production constraints,” he said.

Then, on the April conference call, Musk said volume production of 4,680 cells was still 12 to 18 months away.

The recent departure of Jerome Guillen, Tesla’s heavy haulage director, is another worrying sign for the Semi. Guillen, who worked on Freightliner trucks during their time at Daimler, joined Tesla in 2010 as Program Director for Model S, the company’s pioneering electric sedan. He was the semi-program’s biggest booster internally and made a brief appearance on stage when Tesla revealed it. Some saw his move from automobile president to head of trucks earlier this year as a demotion.

So now I ask myself: is the semi – without the battery cells it needs and a great manager who is committed to it – basically dead?

There is at least one important factor that could keep the program alive: regulation.

Take out credit

Tesla’s loan receipts consistently exceeded revenue

Source: company information

Tesla Makes money selling regulatory credits to automakers who need help complying with emissions standards for cars and light trucks around the world. Investors view this revenue as a double-edged sword – it’s a good racket (regulatory loan sales soared to a record $ 518 million in the first quarter), but they want to know Tesla of its core business, manufacturing and selling own products, cars can be profitable.

California’s powerful Air Resources Board is developing heavy-duty vehicle regulations with the goal of moving the state’s truck and bus fleet to zero emissions by 2045. It wants to achieve this even faster for segments such as delivery on the last mile. The rulemaking process has been lengthy, but the board has directed employees to submit the Advanced Clean Fleets scheme to them by the end of this year.

Tesla has always been adept at taking advantage of subsidies. If California develops a support and incentive structure for electric trucks, it could provide the very boost Tesla’s semi-program needs to survive.

Before you go

Top-class models presenting the Ferrari high-fashion collection.

Photographer: Vittorio Zunino Celotto

For those who want to wear their racing stripes, Ferrari has a new high fashion collection. The supercar maker debuted its streetwear line this week on a 427-foot runway at a factory in Maranello, Italy. 37-year-old creative director Rocco Iannone, a former Armani designer, told Reuters that the company aims to attract young people and women to the brand.

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