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The Staggering Economics of the Tesla Semi

The economics of the Tesla semi show that it is about 83% cheaper to drive and haul goods than a standard diesel truck. Not to mention the reduction in cost due to less maintenance. The Tesla semi will truly disrupt the trucking industry.

The Staggering Economics of the Tesla Semi

The Tesla Semi is going to start deliveries this year and there is some staggering economics of how much better it will be than a diesel truck.

Elon Musk has stated that the Tesla semi will start shipping this year and that it will have 500 miles of range. This is after many delays, but Tesla is finally ready to start delivering it to customers. In Elon's Master Plan, Part 2, he made reference to building an electric semi.

The first customer of the Tesla semi is not known to the public yet. Some think it will be PepsiCo because they placed an order for 100 electric semi trucks. Tesla will build out Mega Chargers for the Tesla semi in order to make sure it can charge quickly.

The Economics of the Tesla Semi

If you look at average fuel prices and use the website for U.S. Energy Information Administration (EIA), you can see about how much it costs for a trip for a diesel truck on a highway per gallon of diesel fuel. This ends up being about $4.99.

If you use a distance of 200 miles, you can do a calculation with a miles per gallon around 6 and come up with about 34 gallons (at 5.9 miles per gallon). This is simply for the average diesel truck.

With some simple math, you can take 34 gallons * $4.99, which is $169.76 for the cost of fuel for that diesel truck. This equals about 85 cents per mile. The Tesla semi, which is an electric truck, can take that same load and move it 200 miles. With electricity, you must think about it differently.

We can use a 2 kWh per mile usage for the Tesla Semi even though Tesla says the energy consumption is less than that. This will make calculating more simple. If you take 200 miles * 2 kWh per mile, you get a total of 400 kWh consumed. Tesla can also provide an energy cost of about 7 cents per kWh.

You can then take that 400 kWh * $0.07 per kWh which equals $28 total for the 200 mile drive. This is about 14 cents per mile. With this you get:

* A diesel truck trip at 200 miles is $169.76
* A Tesla semi truck trip at 200 miles is $28.00

This is a savings of about 83% and the Tesla semi will have less wear and tear on its brakes, less maintenance due to having no engine and oil changes, along with being a source of clean energy.

For more information on this, you can see this Tweet thread by Alex Gayer:

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Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter or LinkedIn to stay in touch and follow his Tesla news coverage on Torque News.

Image Credit, Ryan Shaw, Screenshot

Comments

GooeyGUI (not verified)    August 13, 2022 - 10:48AM

500mile range, the weight and amount of batteries needed, and the charging time required to get back on the road. This works against an18-wheeler long hauler..

I'm sorry we are just not there yet... But hoping in the next 10 years the battery technology will get there

James (not verified)    August 13, 2022 - 10:50AM

There's an easier way to figure cost savings. Find someone using a Nikola or Volvo or the other electric trucks already on the road to get your numbers.

Rjr (not verified)    August 13, 2022 - 10:56AM

Add back in additional capital expenditures and use local rates (not national) and you still come out probably 30 percent ahead over the life cycle of a truck.

This article is cherry picking data but it is still a good deal if you average it out over 10 years.

Ani (not verified)    August 13, 2022 - 11:19AM

The two assumptions used in the article to justify the operations cost, not considering the initial markup and additional wait times too charge the massive battery.

First, the assumption of 7c per kWh. The average cost of electricity on premise is about 13-15c and the supercharging will cost about 35c to 53c. So, relying on supercharged while driving on the highways, the cost is diesel, no staggering economics there.

The second assumption is that the semi can cover 1 miles with 2kwh. I don't know how the mileage was calculated, but going by experience with car, the efficiency on highways is less than 70%, even when you are sticking to the speed limits. Lesser if you go 10% over the speed limit.

David (not verified)    August 13, 2022 - 12:47PM

Plus the time it takes extra to charge is downtime for the truck, requiring, payment for the driver. Increasing the time to destination.
Plus idle fees, so can't be done while over nighting / sleeping.

Joe's Morgue (not verified)    August 13, 2022 - 1:58PM

I redid your calculations, including the cost of oil, and the cost of DEF, which works out to only a penny a mile. Making the new cost per mile of 86 cents. ($0.86)

I understand you said Tesla can provide, but nobody's going to believe that, including me, so I figured the calculations based on the average kilowatt hour price in the US of 12 and 1/2 cents ($0.12⁵)

200 mi * 12.5¢ = $25, which is still less than 1/3 the cost of driving the semi. That is a more believable number.

Robert Fairchild (not verified)    August 13, 2022 - 3:02PM

The Tesla Semi is not a source of clean energy it is supppsedly a consumer of clean energy. You are also assuming it is charging from solar, hydro, or wind sources. In 2021 20 percent of all power produced came from all sources of "renewable" energy. 38% from natural gas, 22% from coal, 19% from nuclear, and .5% from petroleum. So if we are being truthful about this process depending on your market of use you have a 20% chance you are truly transferring and consuming what is touted as green energy. I don't think anyone with a bit of logic will argue that electic motors are far more efficient and powerful than a similar sized and weighted combustion engine. Lets look at diesel/electric locomotion as a perfect example. But this existing fantasy that all electric is some how will be the savior of the world needs to get back to an acceptable level of logic. And that is before we even begin to discuss all the negative effects of obtaining the materials required to make the battery systems. Or how will we deal with the recycle and or disposal of all of batteries,solar panels, wind mill blades, etc of this new power paradigm. I tend to believe like in every other shift in beliefs we are too caught up in the moment and the possibilities that we knowing over look the total environmental risks over the true long haul. A simple Google search will show how all the 1st gen solar panels are piling up and no one has come up with a financially sustainable solution other crush them and bury them. And since history does tend to repeat itself there seems to be no reason that we will not be in a similar place with this generation of technology when it begins failing in 5 to 10 years.

Matt Fischler (not verified)    August 15, 2022 - 1:23AM

In reply to by Robert Fairchild (not verified)

There are recycling companies buying up the scrap solar.
Silicone, copper, aluminum, and various exodic elements that are extremely valuable.
Plus most solar panels so last 20-30 years and still put out 80% of their power.
Keeping them longer than 30 years is also an option.
Virtually you can say they last for ever out way past when you'll die.

Bill Linker (not verified)    August 15, 2022 - 2:36PM

In reply to by Robert Fairchild (not verified)

There have been several lifecycle analysis of EVs at this point and the production of the battery adds about 1 to 3 years to the CO² payback time of the EV vs an ICE depending on the energy mix of the grid. Tesla recycles batteries into Power Walls. Semi batteries will probably end up being recycled into use at Mega charging stations. In regards to solar panel recycling, Europe is not dropping the ball like the US and is developing this technology now. Personally, I've gotten some cheap (or even free) used panels and added them to my array (had capacity on my inverters).

Before retiring, my uncle made a daily round-trip from the Fresno area down to Los Angeles and back. The Tesla model S supposedly has 75 kWh capacity and weighs around 1200 lbs. I think this puts the likely battery weight of a 500 mile range semi at around 14000 lbs. Note that at about 7lbs per gallon, a freight truck is normally carrying 1000 to 2000 lbs of fuel. The max legal weight is 80,000 lbs, not to exceed 20,000 per axel. If I recall correctly when I used to coordinate transferring wine between warehouses (over 20 years ago), 45k lbs was the max useable freight weight for a single trailer...which agrees with a quick Google search (35k pounds for an empty truck + trailer). Take about 13000 lbs off of this for the extra battery weight (vs full tank of gas) and you have 22,000 lbs or 11 tons. Definitely reduced capacity, but there are PLENTY of things to be transported that have lower weight density than 22 pallets of wine. The semi truck will be a bit niche to start, but it will definitely have a market. The 300 mile range version has less of a weight penalty for shorter trips (by 5000 lbs). Improvements in battery energy density will lessen this penalty and broaden the market... probably in no more than 5 or 6 years. However, the Tesla semi is already a valid and valuable option for short to medium distance hauling of lighter loads. Technology advances more quickly when it is actually being used and consumers demand improvements.

Robert Fairchild (not verified)    August 13, 2022 - 3:04PM

The Tesla Semi is not a source of clean energy it is supppsedly a consumer of clean energy. You are also assuming it is charging from solar, hydro, or wind sources. In 2021 20 percent of all power produced came from all sources of "renewable" energy. 38% from natural gas, 22% from coal, 19% from nuclear, and .5% from petroleum. So if we are being truthful about this process depending on your market of use you have a 20% chance you are truly transferring and consuming what is touted as green energy. I don't think anyone with a bit of logic will argue that electic motors are far more efficient and powerful than a similar sized and weighted combustion engine. Lets look at diesel/electric locomotion as a perfect example. But this existing fantasy that all electric is some how will be the savior of the world needs to get back to an acceptable level of logic. And that is before we even begin to discuss all the negative effects of obtaining the materials required to make the battery systems. Or how will we deal with the recycle and or disposal of all of batteries,solar panels, wind mill blades, etc of this new power paradigm. I tend to believe like in every other shift in beliefs we are too caught up in the moment and the possibilities that we knowing over look the total environmental risks over the true long haul. A simple Google search will show how all the 1st gen solar panels are piling up and no one has come up with a financially sustainable solution other crush them and bury them. And since history does tend to repeat itself there seems to be no reason that we will not be in a similar place with this generation of technology when it begins failing in 5 to 10 years.

Steve (not verified)    August 13, 2022 - 3:05PM

I see lots of quick electrical recharging stations charging $0.35-$0.40 per kWh.

$0.07 is your cost at your private home based charging station, off peak hours.

Carl van Bolderen (not verified)    August 14, 2022 - 11:25AM

In reply to by Steve (not verified)

Tesla semi will Garner huge business in its infancy strictly from short haul, that's the low hanging fruit. Long haul applications are for future when the technology has evolved and improved. Charging stations will be at the destination sites owned by the companies like PepsiCo, they will be located strategically so the truck can unload and reload while charging. Therefore the rate per kWh for charging will be closer to 7 cents. This is how Tesla semis will be used first and the market is so large that Tesla will have more demand than they can build.

Tim (not verified)    August 15, 2022 - 10:37AM

In reply to by Steve (not verified)

$0.07 per kWh is actually what the Semi customers were promised that the electricity would cost at the Megachargers. None are open yet, so any electricity cost is an assumption, but there's never been any indication that it would cost as much as public car chargers.

Jardinero1 (not verified)    August 13, 2022 - 4:25PM

A tesla semi weighs about 25k pounds and a diesel semi weighs about 12k. Max weight allowed in the us is 80k pounds. When a Tesla semi is attached to a trailer it must haul about 13k pound less than a standard semi. This means more trips for the same load as a standard semi. A big part of the cost of running a semi is the driver and the insurance. Drivers get paid by the mile and insurance rates are based, in part, on total miles driven. I am somewhat skeptical of the economist of this technology. I doubt that any private operators would roll the dice on this.

Nutmeg444 (not verified)    August 14, 2022 - 11:05AM

In reply to by Jardinero1 (not verified)

The largest fleets in the country, USPS, UPS, Amazon and FedEx all run out and back routes from hub to hub and hub to station. The vast majority of routes are less than 250 miles each way. Also, most of their 53's are well under 20k of freight fully loaded, and many run less than full trailers or empties backhauled. This type of run constitutes the majority of freight on the road today. Perfect for electric.

Mark Draugelis (not verified)    August 14, 2022 - 4:07PM

In reply to by Jardinero1 (not verified)

Thanks for your comment! I noticed the article never mentioned the load. I was wondering about a shipment of sodas also. So, for this to work, we will need twice as many trucks on the road? Great for jobs, I guess! With twice as many trucks on the road, sounds like a lot of gridlock to me!

Link (not verified)    August 14, 2022 - 11:25PM

In reply to by Jardinero1 (not verified)

Only day cab trucks weigh around 12k.
Full sized sleepers weight is over 17,500.
Most over the road drivers are paid by the mile, some are percentage, local are generally by the hour.

I have over 22 years OTR in Pete's and kenworth as well as other makes.

Pat (not verified)    August 15, 2022 - 12:22PM

In reply to by Jardinero1 (not verified)

Your comment on the way to semi trucks is wrong a standard diesel semi weighs about 18,000 pounds not 12. A van trailer is somewhere around 13,000 lb. At 25,000 lb of Tesla semi would be comparable to a custom sleeper truck. This would still allow the Tesla truck to scale around 40,000 pounds of payload.

Kirk G (not verified)    August 13, 2022 - 5:00PM

A: The Tesla semi will not cost $150,000, just addd up the battery costs.
B: Plenty of electric tractors already on the road and available for sale (Peterbilt, Volvo, Freightliner, Kenworth) and they are all achieving .5 miles per kWh at 82k GVW with a variety of different battery chemistries and electric motor locations. So 500 miles = 1000kWh of battery capacity. Even if we predict Tesla having a 20% efficiency advantage, they still need 800kWh of batteries.

Dallas (not verified)    August 13, 2022 - 5:26PM

It's hard to find a megacharger. You would have to build one. Might want to calculate the cost to build one of those if the electric utility even allot you that much power.

If you can find a charger, it won’t be 7 cents per kw A regular Tesla auto cost as much as some cars to fill up now.

If the electricity is coming from the burning of coal or fuels, you are doing more harm than good.

Fred (not verified)    August 15, 2022 - 2:37PM

In reply to by Dallas (not verified)

You use energy to charge these electric cars and machines. The process to mine lithium for batteries permanently destroys the plant. There is no coming back from it. Garage.

Charles (not verified)    August 13, 2022 - 9:51PM

Plus consider the 1800 mile trip. The diesel truck with its 300 gallon tanks and at 6 mpg can make the trip nonstop. The Tesla will have to stop to recharge 4 times and if you use the recharge at 20 percent and don't charge over 80 percent the Tesla will only have 300 miles of range and will need to recharge 6 times. This shows unless battery technology greatly increases that the Tesla semi will be usable for only limited small runs and at this time is no threat to diesel dominance.

Melvin (not verified)    August 14, 2022 - 10:11PM

In reply to by Charles (not verified)

It seems to me if the Tesla Semi isn't going to be the game changer some are hyping out to be. Maybe Elon should consider makeing the motors and battery packs that were ment for the Semi available for smaller fleet freight trucks like FedEx, UPS, USPS cariers as well as RV motor homes where retiries could use a vehicle that doesn't need much maintenance or the high cost of fuel. Just pitching an idea. Maybe it would help get EV's into the market, maybe not?

Etchy (not verified)    August 15, 2022 - 1:26AM

In reply to by Charles (not verified)

first - Short haul trucking (less than 150 mi radius) accounts for about 1/3 of all truck drivers, over 200,000 jobs. So not exactly a small number.

second - long haul drivers are legally required to stop and rest every 8 hours of driving, and can't drive more than 11 hours per day. so an 1800 mile (~30 hour) trip would require stops, even with two drivers.

darryl williams (not verified)    August 15, 2022 - 5:24AM

In reply to by Charles (not verified)

Its not going to be a long haul truck. There. Now you know that. Shush up.
You spend so much time complaining about that one thing while 100% ignoring where its practical.
Ease up with the propaganda n think it through.

Bruce C (not verified)    August 15, 2022 - 9:55AM

In reply to by Charles (not verified)

Hybrid is still the best technology right now, I can drive from Orlando FL to Raleigh NC for approximately $60 and I don't have to wait for recharging. Until the infrastructure is better or you are a short distance daily driver all electric is not the answer.