Pepsi has 36 Tesla Semi Already and Installing Megacharging

PepsiCo is deploying 36 electric Semi trucks from Tesla, with 15 in Modesto and 21 in Sacramento, so far and will deploy 100 Semi Trucks in 2023.

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.

12 thoughts on “Pepsi has 36 Tesla Semi Already and Installing Megacharging”

  1. Every site I looked up said that about 200k to 250k simi trucks are sold in the US and around 3-4 million are in operation so why are you saying10 to 20 times as many are being sold?

    We have been hearing about thin film solar cells being developed for YEARS so if inexpensive, efficient kind are available at what price would it make sense to apply them to the tops of simi trailers?

    We have been seeing the Chinese Real Estate market which is about 30% of their economy and where most of the population have 70% of their wealth has been crashing for the last year or two, if China goes into depression will they really keep buying millions of EV’s?

    • Globally, 4 million are large and Semi trucks are being sold. World market. Asia has 80% of the trucks and truck sales. China has 50% of the trucks and truck sales.

  2. Wow, Cali is giving Pepsi 15.4 million….and they wonder why they are in massive debt, with junkies living on the streets. I swear, everyday I think they can’t get any dumber…then they find a way to impress me with a whole new level of stupidity.

  3. flag-ships like Pepsico… can bear the risk in losing money with such a risk-taking project.
    When failing, they publicly win in trying and when they win, right they win 2 to 4 times.

    • They did not lose the money. With $15.4 million California grant and $40,000 federal subsidy per vehicle: counting 36 vehicles, Pepsi got 427.777.+40.000=467K USD per truck. since the truck should not cost that much. They got free money and the taxpayers paid for the trucks too…

      • Always amazing how these projects suddenly make financial sense when taxpayers get to pay for them. With enough subsidies, you could make a fleet of skateboards carrying single cans of soda while being pushed by a people be profitable.

  4. This is a good thing. The IRA legislation will only give advancements and changes like this a shot in the arm

  5. In the same interview you quote, Mike O’Connell, also clearly states that the new trucks are used by Pepsi to transport lightweight stuff (potato chips and similar).
    Pepsi VP says that “The semi can haul Frito-Lay food products for around 425 miles, but for heavier loads of sodas, the trucks will make shorter trips of around 100 miles.”
    So to me, it is clear that the Tesla Semi has a payload/range issue.
    Furthermore, doing some calculations about the $15.4 million California grant and $40,000 federal subsidy per vehicle: counting 36 vehicles, Pepsi got 427.777.+40.000=467K USD per truck. In 2017 Musk claimed that the price tag of the 500-miles-range semi was projected to $180,000. This is unlikely since the semi’s battery alone will probably cost 160K-220K (assuming a cost equivalent to 10 Model 3 batteries). But even assuming that the Tesla semi costs twice as much as Musk’s initial price, with the incentives, Pepsico got the trucks for free and 107K USD on top of that.
    Even in the case that the trucks are underperforming, if the incentives are still active, Pepsico might still want to expand its fleet just to get more money.

    • I think you are forgetting that Pepsi also is buying 2 Megapacks for each of the 2 sites where they are basing the Tesla semis. That is a bit over $8 million more cost. If you divide that among the 36 semis that adds more than $200,000 to the cost of each semi. I don’t know what the cost of the Tesla semis are, but if we take your guesses, that brings the total cost for the semis and Megapacks to about the total $15 million grant plus the $40,000 per vehicle. My guess is that the grant was sized to exactly cover the entire cost of the 36 semis plus the 4 Megapacks. So, yes, it looks like California is giving Pepsi a fleet of 36 Tesla semis + 4 Megapacks at no cost.

      If Pepsi follows through on their stated intention to buy 100 more semis next year, I wonder whether they will get a further grant from California. My guess is that they would not get another grant, but who knows how that grant program is set up? But if they don’t get an additional grant from California, Pepsi would be paying all but $40,000 of the cost for each of those additional semis. If they do follow through on that, they probably feel the Tesla semis are worth the cost. We’ll have to wait and see what Pepsi does on that.

      Something else you might be overlooking: Pepsi might be initially limiting the load and/or range for the Tesla semis if they do not yet have the Megapacks installed, and therefore are limited in the amount they can charge the semis overnight. If that were the situation, that should have been explained in the article, so maybe my guess about that is wrong, but if I am right, it wouldn’t be the first time that important information was not included in stories.

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