Rising Demand for Tesla's Electric Truck Makes It a Stock to Watch
Efficient stock trading involves studying the markets and the business decisions made by the companies which could potentially transform their stocks positively or negatively. As the New Year takes shape, you'd be looking at stocks for potential investment.
Tesla ($TSLA) has yet to release its announced electric semi that appears to be a revolutionary product with the potential to shake up the trucking industry. But the pre-orders have started piling up.Why the Tesla Semi Is Attracting Corporations
Though the initial cost of the Tesla Semi is greater than its diesel counterparts, Tesla claims the electric truck provides significant advantages of conventional diesel semis and the figures, mentioned in Teslarati, are hard to swallow - a 0 to 60 mph sprint in just 20 seconds with a load of 80,000 pounds and a 5% grade climb at a speed of 65 mph! Contrast that to a diesel truck that would, according to Tesla, take a minute to chug along from 0 to 60 mph carrying an 80,000-pound load, and won't climb a 5% grade at anything more than 45 mph. But the most mindboggling figure is in fuel savings - Tesla claims that its electric semi will help owners save $200,000 in fuel over a million miles of running, apart from other savings!Pre-orders Have Been Piling Up
Even if you feel these figures are way too optimistic, clearly many global businesses have been convinced to place orders. And, the number of these corporations is keeping on rising, according to this Nasdaq article by Motley Fool's Danny Vena. They certainly believe this truck is promising and could help improve their profitability, or at least want to try it out. It would be fair to say that no other Tesla product has managed to stir such a kind of buzz.
Analysts claim that Tesla could have received more orders than what is being reported. The reported pre-orders are from United Parcel Service ($UPS) – 125 trucks, PepsiCo ($PEP) - 100 trucks, Sysco ($SYY) – 50 trucks, Anheuser-Busch InBev ($BUD) – 40 trucks, JB Hunt ($JBHT) – 40 trucks, Loblaw ($L) – 25 trucks, Walmart ($WMT) – 15 trucks, DHL ($DPW) - 10 trucks and Meijer - 4 trucks. All that amounts to a total of 409 trucks pre-ordered.Tesla Could Have More Orders than Reported
However, Morgan Stanley analyst Adam Jonas claims that Tesla could be having orders for 1,230 trucks and not just 409. Tesla has a more expensive and limited edition version of its electric semi, called the Founders Series. The Founders Series is priced at $200,000. Tesla reported that only 1000 units will be produced. Jonas suggests that Tesla could have reserved the first 1000 orders for these limited edition versions. The reason behind Jonas' suspicion is an Instagram post where a landscaping company appears to be revealing its Tesla Semi reservation number.
Tesla's regular Semi 300-milerange truck starts at $150,000 while its 500-mile range starts at $180,000. Teslarati considers it competitive pricing, also taking into account the overall cost-savings all through its usage. The $200,000 worth of claimed savings in over a million miles makes up for the asking price.Improved Operational Efficiency Motivating Factor for Corporations
The global corporations that pre-ordered the Tesla Semi have professed goals that are generally quite similar – improve efficiency of transportation through reduced costs, less driver fatigue and improved speed, and reduce carbon footprint through lesser diesel consumption. UPS, that has the highest reported Tesla Semi pre-orders, did provide Elon Musk's company with active trucking data from its over 8,500 global vehicles. UPS claims that with its Tesla truck order, it can attain its goal of cutting down its greenhouse-gas emissions in 2025 by 12%.
There are just some concerns as to whether Tesla can live up to the demand. There are production issues associated with the Model 3, as Elon Musk himself admitted back in July 2017. But he later informed that those issues were getting under control. The concern is whether those issues may crop up again with the semi manufacture. Tesla Seems to Be Up to the Challenge
But Tesla has obviously foreseen the challenges involved and taken the steps to ramp up production to satisfy demand. Unless it has taken those steps, it wouldn't be able to convince global corporations to place orders. Tesla has always succeeded in proving detractors wrong. So let's see how the company handles this. It's quite an interesting period, and the $TSLA stock will be reflecting the successes of the company's efforts. It would seem that the good times are coming for Musk’s stereotype-bashing electric automotive company.
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