PepsiCo is purchasing the big trucks “outright” and is upgrading its plants, including installing four 750-kilowatt Tesla charging stalls at both its Modesto and Sacramento locations, PepsiCo Vice President Mike O’Connell said in an interview. A $15.4 million California state grant and $40,000 federal subsidy per vehicle helps offset part of the costs.
United Parcel Service and food delivery company Sysco have also reserved the Tesla trucks, while retailer Walmart is testing alternatives.
“We keep the trucks for a million miles, seven years,” PepsiCo Vice President Mike O’Connell said. “The operating costs over time will pay back.”
Brian Wang, Nextbigfuture, was on a Tesla panel discussing Tesla Semi and how its introduction was the introduction of the Tesla Master Plan 3. NOTE: I, Brian Wang, am clearly a Tesla bull, Tesla share owner, co-author of a book on Elon Musk and his companies and maker of Youtube videos. However, I am also a futurist with a public prediction track record that is top 56 out of thousands of people. Prediction accuracy about 80% correct.
Tesla Master Plan 3 – Make Tesla Semi an economic offer that can’t be refused. Have it require Megapack everywhere and still be an economic must have. Scale to 4 terawatt hours per year with all Semi and truck domination and another 4-6 from Megapack.
Master plan 3 is all about scaling from 150 gWH of batteries today and 1.4 million cars per year to 20+ million cars and 3-15 terawatt hours of batteries per year. This is 20 to 100X growth in the scale of business.
Brian has decribed the case for a huge impact from Tesla Semi.
Domination of medium and heavy trucks is a $1 trillion a year business using 3 terawatt-hours per year in batteries and requiring 4-6 terawatts of megapacks for reinforcing and buffering the electrical grid means Tesla goes from 150 GWh/year of batteries to 8-10 terawatt-hours per year in 15-20 years and it is 50X growth. Getting to 2-3 terawatt-hours per year by 2030 is 15-20X from today.
Challenges for Tesla and a Bear Market
There are still large challenges for Tesla. The stock is down to a 46 price-earnings multiple despite tripling net income. Nothing in this article or this site is financial advice…do your own research.
What is the bear case in demand and selling price ? Use the trailing 12 months for earnings and use 30, 40 or 50 trailing PE. This quarter. 430k deliveries or higher. 75K more cars than in q3. Adding 75k cars at over $50,000 average selling price is about $4 billion of added revenue for the quarter. What for q1 2023? 500k-550k? Austin and Berlin are each already at 3k per week. Adding third shift reaches 5k per week. 13 weeks in a quarter. 65k each quarter if things go flat. Austin and Fremont will have $7500 tax credit to reduce selling price by 13%. Starting next year. Plus $2500 or per car for battery tax credit. Direct cash. 270k China. Per quarter. 150-160k Fremont. 65k Austin. 65k Berlin. 550-560k per quarter. This is 200,00 cars more than Q3 2022. This is an addeed over $10 billion in quarterly revenue.
This means 2.2 million car delivered for 2023 without growth beyond q1. $27b revenue per quarter. An extra $40 billion in revenue and about $10 billion in extra net income. Energy production growing. I think energy scales to profitability past 5gwh per quarter. Cybertruck q3. Semi a few thousand in 2023. Targeting 50k in 2024. 10k per car backstops US demand and volume of sales.
Compare the net income per quarter for Tesla with Amazon, Google, Nvidia and other tech companies. Tesla has much faster net income growth.
I think the potential for Tesla price cuts in 2023 and beyond exists and is especially likely in China and Europe situation. There will still be 1+ million combined Fremont and Austin sales in USA with the $10k margin passing or tax supported price cuts.
Tesla FSD (called Full Self Driving but which I define currently as co-pilot) besides recognizing all revenue and no revenue deferred. There are two big future levers. Free month trials to get signup’s especially 1.5 million who did not buy FSD originally. Tesla can eventually bun dle insurance and FSD. Half of the people are by definition below average drivers. They especially suck at driving. The statistical bottom half. If they buy FSD and have it on all month then they will get a discount on Tesla insurance. This can drive FSD up towards 30-50% adoption. Up from 15% in US. This would mean a potential 1 million added FSD signups in 2023 or early 2024. 1.5 million existing non-FSD, 350k already have FSD and 1 million new cars sold in north america in 2023. 40% adoption for 2.5 million cars would be 1 million. This is $15 billion in direct sales or $2 billion in recurring monthly subscription revenue.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
A frequent speaker at corporations, he has been a TEDx speaker, a Singularity University speaker and guest at numerous interviews for radio and podcasts. He is open to public speaking and advising engagements.