UPS Pre-Orders 125 Tesla Semi Electric Trucks

Originally published CleanTechnica.

UPS owns a lot of trucks. According to Quora, as of 2015, it had “104,926 package cars, vans, tractors, and motorcycles.” Of that total, 7,200 were “alternative fuel and advanced technology vehicles.” It also has about 25,000 trucks dedicated to its supply chain delivery operations.

Tesla Semi via Tesla

The company is always looking for ways to lower its costs of operation. It uses sophisticated route planning software so each vehicle drives the least number of miles on each route. It even goes so far as to avoid left turns against oncoming traffic whenever possible. Waiting for an opening takes precious seconds, and time is money.

UPS announced today that it has placed the largest pre-order yet for Tesla Semi electric trucks — 125. Until this latest announcement, PepsiCo had pre-ordered the most Tesla Semi trucks at 100 units. The Tesla trucks are expected to sell for $200,000 each, which is about $75,000 more than the company pays for a typical diesel powered tractor. But it expects significantly lower fuel and maintenance costs will more than offset the price difference over the useful life of the trucks.

Scott Phillippi, senior director for automotive maintenance and engineering for international operations at UPS, tells Reuters that his company has already provided real-world data to Tesla on how its trucks perform on normal streets. “As with any introductory technology for our fleet, we want to make sure it’s in a position to succeed,” he says.

The 125 Tesla trucks will be used primarily in the United States. Although, the precise routes they will follow has not yet been determined. Tesla will provide consultation and support on charging infrastructure. “We have high expectations and are very optimistic that this will be a good product and it will have firm support from Tesla to make it work,” Phillippi said.

Reuters claims Tesla has received 410 pre-orders for the Semi, which is not slated for production until 2019 at the earliest. Tesla has not yet said where it will manufacture the Class 8 electric tractor.

410 orders at an average price of $200,000 would total $82 million in revenue for Tesla. Here, again, is a hypothetical look at Tesla revenue and profits based on various estimates and hypotheticals. For background, read this CleanTechnica article.

Orders Average Price Total Revenue Profits based on 7% Gross Margin Profits based on 10% Gross Margin Profits based on 15% Gross Margin
410 170,000 $69,700,000 $4,879,000 $6,970,000 $10,455,000
410 200,000 $82,000,000 $5,740,000 $8,200,000 $12,300,000
8200 (hypothetical) 170,000 $1,394,000,000 $97,580,000 $139,400,000 $209,100,000
8200 (hypothetical) 200,000 $1,640,000,000 $114,800,000 $164,000,000 $246,000,000

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Steve Hanley

Closely following the transition from internal combustion to electricity. Whether it's cars, trucks, ships, or airplanes, sustainability is the key. Please follow me on Google + and Twitter.