Tesla shares rise on Electric Semi pre-orders

In November, Tesla, Inc. (NASDAQ: TSLA) announced the price for its electric semi, starting at $150,000 for the 300-mile range truck and $180,000 for the 500-mile range truck. Tesla also mentioned a $20,000 reservation fee. A big concern for the electric semi was that it could potentially be a relapse of what happened with the Model 3.

Customers who reserved the Model 3 had to wait longer than the original expected time due to in-factory production delays. Investors and analysts were concerned that electric truck could repeat it, but it doesn’t seem to stop major delivery companies who have begun to reserve the truck.

The most recent reservation was by Pepsico, Frito-Lay subsidiary, who confirmed their order with Reuters. Pepsico reserved 100 electric trucks, which values its order alone at around $15 million to $20 million, making it the biggest reservation yet.

Anheuser-Busch, Budweiser’s brewery, confirmed an order in a statement that it has reserved 40 electric trucks in efforts to improve environmental concerns as well increase operation efficiency. By integrating Tesla’s trucks into Anheuser-Busch’s fleet, the company hopes to cut down on carbon footprint by 30 percent by 2025.

Sysco also confirmed in a statement that it has reserved 50 trucks for the same reasons at Anheuser-Busch. Sysco mentions the 500-mile range truck, assuming that the food deliverer may be purchasing the highest range trucks.

From when Tesla had announced the truck’s price to date, Tesla’s shares have increased approximately 12.2 percent.

It was previously reported that Tesla burns through nearly $1 billion a quarter in operational expenses. Data showed that at this rate, Tesla is projected to exhaust its cash on hand by next year August.

In order to combat it, Elon Musk, Tesla’s CEO, began to take the reservation fees. But even with the major companies who reserved the trucks (Pepsico, Anheuser-Busch, Sysco), generates approximately $1 million. Once delivered, it will generate roughly $28.5 million to $38 million in revenue, which is still a meager margin to what the automotive manufacturer is losing.

In the third quarter, Tesla reported overall automotive revenue of $2.36 billion, but still reported an overall net loss of $671.16 million for the quarter.

Although, automotive revenue did grow 10 percent year over year, the problem is the expenses as it keeps growing. Tesla will need to figure out how to cut costs but be able to produce at a more rapid rate. As for now, Tesla may be facing a downhill period until the production picks back up, especially for its Model 3 line.

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