Welcome back everyone!
I’m Jordan Giesige and this is The Limiting Factor.
As Elon Musk said at the Tesla Semi Delivery event, even though trucks only make up about
1% of U.S. vehicle sales, they make up 20% of U.S. vehicle emissions.
If Tesla’s mission is to accelerate the transition to sustainable energy, why has
it taken them 15 years to develop a Class 8 electric Semi?
Furthermore, why was the Tesla Semi delayed from 2019 to 2022.
To answer those questions, today I’m going to walk you through the technology, scaling,
cost, and ecosystem factors involved in a bringing the world’s first long range electric
Semi to market.
Before we begin, a special thanks to my Patreon supporters and YouTube members.
This is the support that gives me the freedom to avoid chasing the algorithm and sponsors.
As always, the links for support are in the description.
Let’s start with efficiency.
Based on this article by a Tesla Firmware engineer in 2007, the powertrain efficiency
of the original Tesla Roadster was 80%.
This included electrochemical losses in the battery, DC to AC conversion losses in the
inverter, electrical losses in the motor, and mechanical loses in the transmission and
wheels.
This means about 20% of the energy released by the battery was turned into heat energy
instead of moving the vehicle forward.
Moving closer to present day, based on this article by Car and Driver Magazine, by 2021
Tesla’s wheel to motor efficiency was around 90%.
The Car and Driver article wasn’t as well-written as the 2007 article by the Tesla engineer,
but we’ll assume that 90% is an apples to apples comparison.
That leaves us with an increase in powertrain efficiency from 80% to 90%, which is a total
improvement of 10%.
However, there’s more to the story than that.
Electric vehicles recapture a significant amount of energy when going down hills and
braking by using the electric motors as generators.
As the 2007 article points out, with an 80% powertrain efficiency from battery to wheel,
the same losses occur from wheel to battery during regenerative braking events.
So the total roundtrip efficiency is 80% times 80%, which is at most 64%.
With a powertrain that’s 90% efficient, the round-trip efficiency is 81%.
So, a 10% one-way efficiency improvement leads to a 17% round-trip efficiency improvement.
I imagine this is a big part of the reason why Tesla told Car and Driver magazine that
an 8-10% improvement in efficiency will lead to a range improvement of 15-18%.
That is, if the 500 mile range Tesla Semi were built 10-15 years ago, just from power
train inefficiencies alone, the range would have maxed out at around 450 miles.
Next, we have to factor in 15 years of battery cell and pack energy density improvements.
The 2010 Tesla roadster had a pack level energy density of 120 watt hours per kilogram.
By 2022, that number had increased to over 180 Wh/kg in new Tesla vehicles.
If we do some back of the napkin math and assume that the Tesla Semi has a 900 kWh battery
pack that means the current battery pack in the Tesla Semi weighs almost 5 metric tonnes
and 15 years ago it would have weighed 7.5 tonnes.
That may not have made the Semi commercially unviable, but certainly would have reduced
the range and the number of routes the Semi could travel.
However, the real killer for a Semi around 2008 to 2010 would have been volumetric energy
density.
The volumetric energy density of lithium ion battery packs has increased by nearly 8 fold
in the last 15 years.
That is, in 2008, it simply wasn’t possible to fit enough batteries under a Semi to provide
more than 100 miles of range.
Taking into account the 2-3 years required to bring a product to market from a test mule
prototype, the earliest a 500 mile range Semi would have been possible from the perspective
of volumetric energy density was around 2017.
I think this is why Tesla unveiled the Semi in 2017 and expected to start delivering it
in 2019.
So if the Tesla Semi was technically possible in 2019, it was scheduled to begin deliveries
in 2019, and it’s the Tesla product that most aligns with their mission, why wasn’t
it delivered in 2019?
As we know, Elon is led by his convictions and can be overly optimistic, but ultimately
bends to reason after people talk him off the ledge or reality smacks him in the face.
The reality is that from 2019 to 2020 Tesla’s cell supply only grew by about 9 GWhs.
This is in contrast to the 30-45 GWhs of cells that would have been required to spool up
a 50,000 unit per year Semi production line.
Then, in 2020 to 2022, the cell supply shortage was then compounded by microchip shortages,
where Tesla and every other auto manufacturer couldn’t source the microchips needed to
produce vehicles.
Yes, Tesla could have made a smaller Semi production line that produced 10,000 units
per year with 9 GWhs but producing the Semi at smaller scale would have meant a smaller
profit margins.
By waiting a few years, the global cell supply was in a much better position to ramp the
Tesla Semi.
It’s now growing by hundreds of GWhs per year rather than the 75 GWhs it grew by from
2019 to 2020.
Plus, scale aside, due to technology improvements, the 2022 version of the Semi is likely more
efficient, lower weight, and therefore cheaper to produce than it would have been in 2019.
We also have to take into account opportunity cost.
If Tesla had produced the Semi, they would’ve had to forego growth in their vehicle business.
From 2019 to 2022, it made more sense to direct their limited parts supply to the high margin,
cut and paste production lines of the Model Y.
Yes, launching the Semi in 2019 would have better for reducing CO2 emissions and accelerating
the transition to sustainable energy, but it may have negatively affected Tesla’s
profit margins by diverting resources from their high margin vehicle business.
That might seem brutally capitalistic, but Tesla is a business and the focus on profit
is what’s made the Semi possible in the first place.
Let’s step back for some perspective on cost and profit.
Since 2008, the cost of a battery pack has dropped by at least an order of magnitude.
Today, the roughly 900 kWh Semi battery pack likely costs over $100,000 dollars but would
have cost over $1,000,000 dollars 15 years ago.
Given that you can expect a new Diesel Semi to cost $200,000, a million dollars for just
the battery was never going to be commercially viable.
What’s made the Semi possible now, years later, was Elon Musk’s original Master Plan
for Tesla.
The only way to make a $1000 per kilowatt hour battery pack commercially viable was
to put it in a sports car that could be sold to people with deep pockets and a passion
for technology.
That sports car, the original Tesla Roadster, triggered interest in EVs and increased the
demand for battery cells.
That led to increased scale and therefore cost reductions and technology improvements
that Tesla leveraged to build the Model S in 2012 and the Model 3 in 2017.
So, despite the fact that an electric Semi has 20x the impact on the environment as an
electric vehicle, the Roadster, Model S, and Model 3 platforms had to be done first to
lay the groundwork for the Semi.
Some might argue that all this wouldn’t have been possible without Chinese battery
material suppliers.
While that’s true, Tesla created global demand.
Elon’s original Master Plan has accelerated the transition to EVs globally by making it
clear that EVs are not only viable, they’re the future.
When Tesla enters a new product category, they make the most compelling and commercially
viable product in the world, and the Semi is no exception.
We only have to look at the Tesla Semi vs the BYD 8TT as proof of this.
The 8TT has 125 miles of range and takes over two hours to get to a high state of charge
vs the Tesla Semi’s 500 miles of range and 30 minutes to a 70% state of charge.
Beyond efficiency, energy density, cell supply, and cost what are some other reasons why now
was the best time for Tesla to launch the Semi?
To be accepted as a serious contender versus Diesel Semis, the Tesla Semi needed a fast
charger that was rapidly deployable and low cost.
The last part is easy for Tesla because they already use prefabricated supercharging stations
and manufacture them in high volume.
The difficult part is providing enough power for a Semi sized battery pack.
As I said a moment ago, the Tesla Semi can charge to 70% in 30 minutes.
On a 500 mile range Semi, that’s 350 miles of range in a half hour.
Compared to other Semi’s on the market, that’s about 3 times more range in 30 minutes.
As far as I can tell, none of the other Semis would be able to crack even 100 miles of range
in 30 minutes.
Why does the Tesla semi charge so much faster?
For, me the first two limiting factors that come to mind for the charging speed of a semi
are cooling the battery pack and getting enough power to the battery pack quickly enough.
As you’ll knowing from charging your cell phone, your battery heats up as it’s charged.
For an EV battery pack that’s thousands of times larger, a cooling system is required
to keep the battery cells from getting too hot and degrading.
Although cooling is a challenge, most EV manufacturers can cool their batteries fast enough to give
the vehicle a good charge within a half hour.
For that reason, my view is that although cooling a large battery for a Semi would pose
some unique challenges it’s not likely that Tesla is the only company that could solve
that problem and therefore cooling probably isn’t the reason why the other Semis charge
more slowly.
This means that the bottleneck for the other Semis is most likely the ability to provide
extreme amounts of power in a short period of time.
If you watched my charging at Megascale video, you’ll know that the power required here
is likely greater than 2 Megawatts.
And, as far as I’m aware, Tesla is the only company that has operational fast chargers
that are capable handling electrical loads of over 1 megawatt.
However, an even greater challenge is the enormous load that mega chargers will pull
from the grid.
As far as I’m aware there are only two options here.
The first is to build a substation to increase the peak power delivery to the charging site.
A substation isn’t the best option because it’ll result in higher electricity costs
and because there’s a 1-2 year wait for substation parts.
The better option is to use a smaller electrical service and buffer it with a multi-megawatt
hour battery pack.
As far as I’m aware, no one is deploying as much grid storage production capacity as
Tesla.
Last year they started ramping a facility in Lathrop California that can produce 40
GWhs or 10,000 megapacks per year, which is another reason why it’s a good time to a
launch the Semi: Lathrop can supply an abundance megapacks to build out megacharger stations.
That is, for the time being, not only is Tesla the only company that offers a Semi that can
charge quickly, they’re the only company that can provide the charging and grid infrastructure
necessary for fast charging semis at scale and low cost.
In summary, why did Tesla launch the Semi now?
In my view, the limiting factor for Semi production evolved as the years passed.
Up until 2017, the technology wasn’t there because powertrains were less efficient and
because battery pack volumetric energy density wouldn’t have allowed 500 miles of range.
After 2017, it took another 5 years to see the semi delivered despite Tesla’s guidance
of deliveries for 2019.
In 2019-2020, Tesla may have been a little over-optimistic in terms of the cell supply
that would be available.
Furthermore, it may have made more strategic sense to continue ramping high margin Model
Ys with cut and paste lines.
In the meantime, Tesla could continue to refine the Semi architecture in preparation for a
launch with a higher production rate, better technology, and higher margins to improve
its commercial success.
Then, of course, 2020-2022 was chaos for every manufacturer, so I wouldn’t necessarily
blame delays in those years on Tesla.
Finally, although I don’t think it delayed the Semi launch, the Tesla charging ecosystem
is in a much better position to support the launch of fast charging semi with their new
immersion megacharger technology and a healthy supply of megapacks from Lathrop.
Now, in 2023, the Semi’s finally being delivered to customers in low volume and Tesla’s advised
that they’re tentatively aiming for 50,000 units of production in 2024 in North America.
To give an idea of the scale here, with one factory Tesla will be the second largest seller
of Semis in the United States.
That’s a massive change to the industry in just one to two years.
The question is, will Tesla hit 50,000 units delivered in 2024?
Given the track record so far, I’m going to assume they’ll hit a production run rate
of 50,000 units per year in 2024, rather than delivered, which means they may hit 50,000
units delivered in an entire year in 2025.
Which, at that point, hopefully they have another 50,000 unit production line spooling
up in North America or Europe.
Of course, that’s just a guess on my part based on Tesla’s track record, let me know
what you think in the comments below.
Either way, within a couple of years, Tesla will become a dominant player in the trucking
industry.
With Tesla offering the best electric Semi and ramping it so quickly, this begs the question,
will Tesla gain a near monopoly in the trucking industry by the end of the decade?
That’s exactly what I’ll explore in the next Tesla Semi video.
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