Connect with us

Investor's Corner

How Tesla’s Semi will dramatically alter the trucking industry

Published

on

The Tesla Semi offers something to the trucking industry that could drastically alter the entire freight moving sector. The trucking industry has seen major changes since it began roughly a century ago and has, despite the assumptions of many outsiders looking in, been one of the more technologically-advanced industries in our nation. Trucks themselves have seen huge changes in the past few decades while the freight industry as a whole has been reinvented and revamped multiple times over in that same time period.

Nasdaq.com contributor Martin Tillier mentions the impacts that the Tesla Semi and others with similar game-changing technologies will have on the trucking industry long-term. Most notably with autonomous trucks and their electric powertrains.

“The technological change that benefits trucking and delivery businesses has been widely reported, but in my experience most people that I ask about it focus on the potential negatives rather than looking for opportunities,” writes Tillier. “..they ignore the biggest beneficiary of all: trucking companies. They are looking at a future where two of their major costs, fuel and drivers, will be dramatically lower..”

Those salient points are much bigger-picture than most commenting on the Tesla Semi and other related vehicles would note. Just about every major manufacturer of commercial vehicles, including Class 8 trucks, is getting in on the electrification game and many are also building towards automation. The companies most often noted, like Tesla and Nikola, are actually side-players compared to the already-established heavy-duty builders like Paccar (Kenworth, Peterbilt), Daimler, Volvo, and the like. Even manufacturers like Cummins are working with alternatives to petroleum-burning drivetrains.

The stakes are huge. According to the American Trucking Associations, over 70 percent of the freight (by tonnage) moved in the United States is moved by truck. There are about ten and a half billion tons of freight moved around the U.S. annually and about 3.6 million Class 8 trucks on the road pulling that freight.

Advertisement

The electrification of trucks is a big step. It won’t happen really quickly, but it will happen eventually. How, exactly, that electrification comes will depend on a lot of things. It could be the battery-powered Tesla Semi or it could be the hydrogen fuel cell-run Toyota-Kenworth collaboration. Or any mixture of things, including the range-extending turbine proposed for the original Nikola design or that of Capstone. Whatever the solution or solutions are, freight-hauling trucks of all sizes are going to become electric. That’s a given.

Why? For the same reason they all went to diesel a few decades ago. It’s more efficient and thus cheaper. Before diesel, most trucks were powered by gasoline and were extremely inefficient, hauling less weight and getting worse fuel economy. Diesel itself saw many changes over time as the engines it powered improved and emissions fell. Currently, trucks use around 38 billion gallons of diesel fuel a year. At four dollars a gallon, that’s about $152 billion in fuel. With electricity, costs could be a fraction of diesel. Roughly a quarter of the cost, in fact, in worst-case assumptions. More optimistic numbers would put it in the 1/16th to 1/8th fractions.

Tesla Semi’s center seating position for drivers

The gains with autonomous self-driving or driving assist technology are even higher. In trucking, the highest cost to the trucking company is the driver behind the wheel, with wages and benefits–not to mention legalities and downtime–having the highest impact on the bottom line. A truck driver can legally drive for 11 hours per day and most drivers average about 600 miles daily. An autonomous truck could drive 24/7, stopping only to load/unload or refuel. Self-driving trucks would also solve a problem that’s long plagued the trucking industry: driver shortages.

Truck drivers will lose jobs, yes. Eventually. Remember, we’re talking decades here, not years. When (not if) automated big trucks take over as the bulk of the industry’s means of moving freight, most drivers will be required to find new careers. We must remember, however, that truck driving is essentially made up of a labor force which has little formal training and mostly on-the-job experience as their primary resume point. These drivers become more skilled with time and hence demand higher wages. The most skilled workers in truck driving tend also be those closest to retirement. Replacements for those skilled drivers are new drivers who’ve completed perhaps three weeks of trucking school and a month of over-the-road training with a slightly more skilled driver as a mentor. This doesn’t make trucking an easy job, but it does mean that those with the most skills are the least likely to lose their jobs when automation becomes the norm.

We can argue until our fingers bleed, typing about the feasibility of the Tesla Semi and Elon Musk’s promises for the truck’s capabilities. Whether Tesla delivers on those promises is moot; as we know that someone, somewhere, and sometime very soon will deliver on similar promises regardless. The trucking industry is going through another sea change. Those in technology, used to a new iPhone every year and who hashtag about cryptocurrencies, might consider a decade or two as a long time to wait. Those in manufacturing and transportation, however, see twenty years as a single generation and their version of 2.0 has huge economic impacts on the nation’s and world’s economies.

The trucking industry knows that electrification and automation are coming. Fast. The Tesla Semi may or may not physically bring that revolution, but it certainly does symbolize it.

Advertisement

Aaron Turpen is a freelance writer based in Wyoming, USA. He writes about a large number of subjects, many of which are in the transportation and automotive arenas. Aaron is a recognized automotive journalist, with a background in commercial trucking and automotive repair. He is a member of the Rocky Mountain Automotive Press (RMAP) and Aaron’s work has appeared on many websites, in print, and on local and national radio broadcasts including NPR’s All Things Considered and on Carfax.com.

Comments

Investor's Corner

Tesla “best positioned” for Trump tariffs among automakers: analyst

Ives has a price target of $315 per share for the electric vehicle maker.

Published

on

Credit: Tesla

Wedbush analyst Dan Ives recently shared his thoughts about Tesla (NASDAQ:TSLA) amidst the Trump administration’s tariffs. As per Ives, Tesla is best-positioned relative to its rivals when it comes to the ongoing tariff issue.

Ives has a price target of $315 per share for the electric vehicle maker.

Best Positioned

During an interview with Yahoo Finance, the segment’s hosts asked about his thoughts on Tesla, especially considering Musk’s work with the Trump administration. Musk has previously stated that the effects of tariffs on Tesla are significant due to parts that are imported from abroad.

“When it comes to the tariff issue, they are actually best positioned relative to the Detroit Big Three and others and obviously foreign automakers. Still impacted, Musk has talked about that, in terms of just auto parts,” Ives stated.

China and Musk

Ives also stated that ultimately, a big factor for Tesla in the coming months may be the Chinese market’s reactions to its tariff war. He also noted that the next few quarters will be pivotal for Tesla considering the brand damage that Elon Musk has incited due to his politics and work with the Trump administration.

Advertisement

“When it comes to Tesla, I think the worry is where does retaliatory look like in China, in terms of buying domestic. I think that’s something that’s a play. And they have a pivotal six months head, in terms of what everything we see in Austin, autonomous, and the buildout. 

“But the brand issues that Musk self-inflicted is dealing with in terms of demand destruction in Europe and the US. And that’s why this is a key few quarters ahead for Tesla and also for Musk to make, in my opinion, the right decision to take a step back from the administration,” Ives noted.

Continue Reading

Investor's Corner

Tesla negativity “priced into the stock at its current levels:” CFRA analyst

The CFRA analyst has given Tesla a price target of $360 per share.

Published

on

Credit: Tesla China

In recent comments to the Schwab Network, CFRA analyst Garrett Nelson stated that a lot of the “negative sentiment towards Tesla (NASDAQ:TSLA) is priced into the stock at its current levels.”

The CFRA analyst has given Tesla a price target of $360 per share.

Q1 A Low Point in Sales

The CFRA analyst stated that Tesla’s auto sales likely bottomed last quarter, as noted in an Insider Monkey report. This was, Nelson noted, due to Q1 typically being the “weakest quarter for automakers.” He also highlighted that all four of Tesla’s vehicle factories across the globe were idled in the first quarter.

While Nelson highlighted the company’s changeover to the new Model Y as a factor in Q1, he also acknowledged the effects of CEO Elon Musk’s politics. The analyst noted that while Tesla lost customers due to Musk’s political opinions, the electric vehicle maker has also gained some new customers in the process.

CFRA’s Optimistic Stance

Nelson also highlighted that Tesla’s battery storage business has been growing steadily over the years, ending its second-best quarter in Q1 2025. The analyst noted that Tesla Energy has higher margins than the company’s electric vehicle business, and Tesla itself has a very strong balance sheet.

Advertisement

The CFRA analyst also predicted that Tesla could gain market share in the United States because it has less exposure to the Trump administration’s tariffs. Teslas are the most American-made vehicles in the country, so the Trump tariffs’ effects on the company will likely be less notable compared to other automakers that produce their cars abroad.

Continue Reading

Investor's Corner

Tesla average transaction prices (ATP) rise in March 2025: Cox Automotive

Tesla Model Y and Model 3 saw an increase in their average transaction price (ATP) in March 2025.

Published

on

Credit: Tesla/X

Data recently released from Cox Automotive’s Kelley Blue Book has revealed that electric vehicles such as the Tesla Model Y and Model 3 saw an increase in their average transaction price (ATP) in March 2025.

Cox Automotive’s findings were shared in a press release

March 2025 EV ATPs

As noted by Cox, new electric vehicle prices in March were estimated to be $59,205, a 7% increase year-over-year. In February, new EV prices had an ATP of $57,015. The average transaction price for electric vehicles was 24.7% higher than the overall auto industry ATP of $47,462.

As per Cox, “Compared to the overall industry ATP ($47,462), EV ATPs in March were higher by nearly 25% as the gap between new ICE and new EV grows wider. EV incentives continued to range far above the industry average. In March, the average incentive package for an EV was 13.3% of ATP, down from the revised 14.3% in February.”

Tesla ATPs in Focus

While Tesla saw challenges in the first quarter due to its factories’ changeover to the new Model Y, the company’s ATPs last month were estimated at $54,582, a year-over-year increase of 3.5% and a month-over-month increase of 4.5%. A potential factor in this could be the rollout of the Tesla Model Y Launch Series, a fully loaded, limited-edition variant of the revamped all-electric crossover that costs just under $60,000.

This increase, Cox noted, was evident in Tesla’s two best-selling vehicles, the Model 3 sedan and the Model Y crossover, the best-selling car globally in 2023 and 2024. “ATPs for Tesla’s two core models – Model 3 and Model Y – were higher month over month and year over year in March,” Cox wrote.

Advertisement

Cox’s Other Findings

Beyond electric vehicles, Cox also estimated that new vehicle ATPs held steady month-over-month and year-over-year in March at $47,462, down slightly from the revised-lower ATP of $47,577 in February. Sales incentives in March were flat compared to February at 7% of ATP, though they are 5% higher than 2024, when incentives were equal to 6.7% of ATP. 

Estimates also suggest that new vehicle sales in March topped 1.59 million units, the best volume month in almost four years. This was likely due to consumers purchasing cars before the Trump administration’s tariffs took effect. As per Erin Keating, an executive analyst at Cox, all things are pointing to higher vehicle prices this summer. 

“All signs point to higher prices this summer, as existing ‘pre-tariff’ inventory is sold down to be eventually replaced with ‘tariffed’ inventory. How high prices rise for consumers is still very much to be determined, as each automaker will handle the price puzzle differently. Should the White House posture hold, our team is expecting new vehicles directly impacted by the 25% tariff to see price increases in the range of 10-15%,” Keating stated.

Continue Reading

Trending