Tesla introduced a new show-stopper last week in the form of a colossal big-rig electric semi. It’s carrying hugely impressive specs, too. But what Tesla CEO Elon Musk offered up was nothing short of a high-flying reveal party for a couple of concepts. Here’s why.
With the Tesla Model 3 production months behind, Musk emerged from an apparently lonely cave of despair on Thursday to the glitz and glamor of an environment he’s most comfortable in: a Tesla reveal, among adoring workers and fans who’ve bought heavily into his electrified vision of the world.
It’s hard to play the spoiler, especially when the truck and a new Roadster (production to begin in 2020, god willing) are striking, impressive products. But there’s a number of questions Tesla needs to answer.
Who Is This Even For?
If you take Musk at his word, the so-called Master Plan for Tesla entailed building fancy sports cars, taking money earned from that, ploughing it into a somewhat-cheaper-but-still-luxury car, taking the money earned from that, and ploughing it into a more affordable, all-electric car, because we need to convert to electric power now or else.
So who’s the target demographic here?
The semi’s going to carry up-front cost that exceed above a normal diesel rig costs.
Is it for the trucker driving through a nuclear wasteland?
And with already razor-thin margins in that market, is a 0-60 time really going to convince a truck company to convert to electric?
With Tesla’s less-than-stellar reputation for quality?
How easy will they be able to get their trucks serviced?
Where Will It Be Built?
Tesla’s Fremont factory is packed to the brim with activity, as Tesla tries to climb out of a production hole its found itself in with the Model 3. The only other (currently available) spot is the Gigafactory in Nevada.
But the massive battery plant remains under construction, and no one’s led to believe at this point that it can handle a new production line — especially for a semi.
Musk has opened up about a possible plant in China, but that’s still a few years out, and at most, it will be used to have quicker access to the market with Tesla’s sedans.
So it’s not an unfair question: Where’s Tesla going to build the semi?
Is 2019 Even Possible For The Semi?
That’s answered by wherever Tesla decides this can be built. Maybe it’s expecting to sell only small quantities early on, but 2019’s the target date for reservation holders of the Model 3.
"The timing of your order may depend on development,— Bozi Tatarevic (@hoonable) November 17, 2017
manufacturing and production schedules, among other factors"
"You understand that we will not hold your Reservation Payment separately or in an escrow or trust fund or pay any interest on your Reservation Payment" pic.twitter.com/NMgetvhUxD
That’s worth stressing: Musk is saying by the time it finally reaches the tail-end of the Model 3 deposit list, Tesla’s going to be churning out semi trucks. It’s hard to take at face value, because, again, it’s entirely unclear where the semi’s going to be made.
Where’s The Money Coming From?
If you listened in on the recent Tesla investor call, Musk mused that it wasn’t exactly in a desperate need for new funding. Perhaps reservations from the truck and Roadster alone can boost Tesla’s cash flow to where it needs to be, but that’s an optimistic read of the situation.
Tesla’s burning through a billion dollars and more per quarter. If it’s serious about launching production at full-steam by 2020, money’s almost certain to be a focal point of investors in the coming days.
And furthermore, the Roadster and the Semi — and their reservation system — force an interesting point:
If I’m reading this correctly, 1,000 “founders” reservations at $250,000 a pop. That’s basically a $250M capital raise for Tesla.— Neil Cybart (@neilcybart) November 17, 2017
It’s all begging a huge question. Is Tesla doing all this dazzle just as a way to raise more cash?
What About The Model Y?
The Tesla crossover seemed to come and go. Musk purportedly wants to start production on it by 2019, but now there’s an even more packed plate to handle. That’s the thing, we haven’t even learned where the Model Y is going to be produced, and now — remarkably — there’s two more products in queue.
Maybe the company has more up its sleeve that it’s not telling us. Maybe there’s a new Model S about to show up in Tesla stores everywhere tomorrow. Maybe the Model 3 will get up and running. Maybe they don’t need a small crossover, like everyone else does.
Maybe – who the hell knows, really – a volume automotive manufacturer can thrive on a steady diet of one mass-market car, and a random smattering of luxury sedans, luxury minivans, trucks, and exotics.
Will This Impact Model 3?
That’s one thing you didn’t hear about Thursday was the uncomfortable elephant in the room that is the Model 3. Shouldn’t this be a main priority for Tesla right now? After years of fending off criticism from various automakers and industry observers, the company managed to generate a list of 450,000 customers interested in an electric car.
It’s still an impressive figure to consider. The electric vehicle market is a fraction of total auto sales; the fact Musk has generated even that much interest in an electric car cements Tesla as a historic company in the auto industry.
But shouldn’t the Model 3 be the concern? Tesla hasn’t even demonstrated it can mass-produce a car yet, and now it’s expecting to sell the world on being able to concurrently roll out three additional vehicles — all within the next two years.
So, check the timestamp and write it down: If the Y, the semi, the Roadster are in production by 2020, and the Model 3 reservation list is whittled down, I’ll eat my shoe. And yours.