Tesla Semi to put EV heavy trucks to the test

Half a decade after Elon Musk first revealed it, the Tesla Semi is poised to reach its first customers before the end of the year.

Why it matters: The rollout will launch a real-world validation process, testing whether electrification is well-suited for heavy trucks, which mostly run on diesel fuel.

• If it works, it could pave the way for more sustainable transportation, transitioning loud, emissions-spewing trucks into quiet, zero-emission haulers.

Driving the news: Musk said late Thursday on Twitter that Tesla Semi production is beginning and that the first units would be delivered to PepsiCo on Dec. 1.

• The first version will have a battery-powered range of 500 miles and will be "super fun to drive," Musk says.
• PepsiCo confirmed that it expects to take delivery of Tesla Semis on Dec. 1, adding that the trucks will be supporting its Frito-Lay plant in Modesto, California, and its beverages plant in Sacramento.

Flashback: It's been nearly five years since Musk first unveiled a Tesla Semi prototype at an event in California, claiming at the time that it would begin production in 2019.

• It's three years late, though the pandemic's disruption of operations and supply chains might be partially to blame.

The big question: Will customers embrace the technology?

• When Musk first revealed the truck, the company received 10,000 preorders from customers such as Walmart, Pepsi, Anheuser-Busch and FedEx, according to Autonomy, an EV subscription company.
• Longer routes are more challenging for EV trucks because they will require more frequent charging, which is costly downtime that diesel-powered trucks don't have to deal with.
• But "you’ve got a customer base that doesn’t need to deploy these trucks into long-haul trucking," Autonomy CEO Scott Painter tells Axios. "There's a whole range of needs that include local delivery as well as medium range."

Be smart: EV semis now qualify for a tax credit of up to $40,000 through the Biden administration's Inflation Reduction Act, making them even more appealing.

Yes, but: The cost could still be prohibitive for a while — and supplies of batteries are limited, which will likely put an indefinite cap on production capacity.

• At one point, Tesla listed a starting price of $150,000 for the Semi, though it's unclear whether that's changed as the cost of lithium — a key component in batteries — has spiked.

The bottom line: The Tesla Semi looks good on paper, but it needs to deliver practical advantages over diesel trucks to accelerate adoption.