Tesla Inc.’s unveiling on Thursday of a new electric truck showed Elon Musk can match Steve Jobs’s ability to wow the tech crowd with a glimpse of the future. If he can equal the manufacturing prowess of Apple Inc.’s current CEO Tim Cook, he might just clobber the oil industry, too.
That’s a big if, given Tesla’s current inability to meet manufacturing targets on the mass-market Model 3 electric car. But if the company really can deliver a battery-powered big rig with a 500-mile range and lower lifetime costs than diesel vehicles, then a big chunk of future oil demand growth is in peril.
Road freight accounts for about a fifth of world oil consumption, mostly diesel, according to the annual World Energy Outlook published by the International Energy Agency this week. Trucks are responsible for about 60% of the increase in global diesel demand since 2000, the report shows.
Freight will be even more important to the oil market in the future. The IEA expects gasoline demand to start falling before 2040 — in part because of the big increase in electric cars — but it says road freight and aviation will have no choice but to keep using oil. Buses and trucks will drive a 2 million barrel-a-day increase in diesel demand from 2016 to 2040, and overall oil demand will keep growing, it said.
Musk said his new truck “can transform into a robot, fight aliens and make one hell of a latte.” Showmanship aside, if the truck is a success, the IEA’s forecasts may prove wildly optimistic.
Customers are already starting to place orders for the Semi, including a grocery chain in the Detroit Three automakers’ backyard.
Meijer Inc. has reserved four Semi trucks for $5,000 deposits apiece, Dan Scherer, a fleet manager for the Grand Rapids, Michigan-based retailer, said after the product’s unveiling Thursday at Tesla’s design studio near Los Angeles. He said the closely held company operates 220 trucks in six states in the Midwest.
“Electric drivetrains are a proven technology,” Scherer said in an interview. “Electricity is cheaper fuel than diesel, and you are less dependent on the spot pricing of fossil fuel.”
J.B. Hunt Transport Services Inc. placed a reservation to buy multiple Tesla Semi tractors, the company said in a statement Friday. The Lowell, Arkansas-based logistics company said it will deploy the trucks on the West Coast.
“Reserving Tesla trucks marks an important step in our efforts to implement industry-changing technology,” CEO John Roberts said. “We believe electric trucks will be most beneficial on local and dray routes, and we look forward to utilizing this new, sustainable technology.”
By James Herron and Dana Hull