Why Tesla Inc (TSLA) Semi Trucks Could Face A Difficult Uphill Climb

Tesla Inc (NASDAQ:TSLA) unveiled its new all-electric semi trucks recently to much fanfare.

The trucks are ultra fast, super smooth, and have a surprisingly long range. They’re also priced competitively with their gas-powered equivalents. Everything seems to be aligning for them to be a big hit, but as CNBC notes, the long-haul trucking industry will probably be very slow to adapt.

Mounting regulatory pressure and future policy changes may push freight carriers to adopt lower-emission power trains in their vehicles, said Barclays analyst Michael Cohen in a note sent Monday.
But Tesla’s recently unveiled semitrailer might be aimed at the segment of the market that will likely be the slowest to transition to electric drivetrains. Constraints on price, range and payload capacity suggest the long-haul market may be the last to embrace electric trucks, after urban freight and other shorter-range, lighter-duty vehicle markets.

While Cohen remains bullish on EV adoption in the trucking industry — especially considering regulatory changes coming down the pike — he still believes “displacing oil in long-haul trucking has the most daunting cost and technological challenges of all segments.” In other words, lighter trucks may have been a smarter choice for Tesla to attack first.

Other critics also note that Tesla hasn’t disclosed the weight of the battery on the truck, which could cut into its payload considerably.

Tesla Inc shares closed at $315.55 on Friday, up $2.95 (+0.94%). Year-to-date, TSLA has gained 47.67%, versus a 18.14% rise in the benchmark S&P 500 index during the same period.

TSLA currently has a StockNews.com POWR Rating of C (Neutral), and is ranked #14 of 24 stocks in the Auto & Vehicle Manufacturers category.

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