Morgan Stanley’s Ravi Shanker, Adam Jonas and team says the Tesla truck could be “the biggest catalyst in trucking in decades.” They believe the NACV show in Atlanta on September 25 could be a catalyst for the reveal”–and potential partners–contenders include Schneider National (SNDR), FedEx (FDX), XPO Logistics (XPO), US Xpress, and Ryder System (R).
* Tesla Semi will have a range of 200-300 miles – primarily to support regional trucking routes.
* Tesla Semi potentially being up to 70% cheaper to operate than a regular truck
Semis might be a “natural market” for Tesla, Shanker and Jonas “struggle to see it worth more than 10% of the current market cap.”
assume that Tesla can deliver 25k units of Class 8 electric trucks annually with battery leasing revenue from 300k trucks in operation driving 30 billion miles (300k trucks x 100k miles per truck per year). This would result in revenue of $0.25 per mile assuming a 50% gross margin on the battery business alone and a blended gross margin of 36% by 2028 (including 15% gross margin on OEM truck sales and 5% gross margin for 3PL logistics). We further assumed 15% SG&A/sales and 5% R&D/sales and a 25% tax rate to achieve $1.4bn of NOPAT on $11.7bn of revenues for Tesla Trucks by 2028. We value this on a DCF model assuming a 13% WACC and an exit multiple on NOPAT of 15x. We have assumed $1.7bn of up-front costs on top of Tesla’s current capex to launch the truck business of which ~$1bn is dedicated to tooling and manufacturing capacity with another $0.75bn for the battery swapping infrastructure, which consists of 1,500 locations (an average of 3 robots per location in servicing an average of 3 trucks per hour on a 24 hour/day schedule). We have assumed a cost per swapping station of $500k or roughly double the cost of the average Tesla supercharger station. These assumptions produce an NPV of $5.1bn or roughly 8% of Tesla’s current market cap.