Tesla’s semi-truck is ready for prime time after PepsiCo said it would use the vehicle to turn its Modesto, California plant into an environmentally sustainable manufacturing, warehousing and distribution center.
PepsiCo plans to replace its existing diesel-powered freight equipment at the facility with 15 Tesla Semi as it looks to reduce greenhouse gas emissions by 20 percent by 2030.
“We believe this is important ‘real world’ validation for the Tesla Semi (and EVs more broadly) and expect the pace of EV adoption in Freight to accelerate from here,” Morgan Stanley equity analyst Ravi Shanker wrote in a note sent to clients on Monday.
The Semi can travel about 500 miles on one charge, and without a trailer can go from zero to 60 miles per hour in five seconds, Tesla says. The fully-electric trucks, which cost between $150,000 and $180,000 will provide more than $200,000 in fuel savings, according to the automaker.
The project, which is expected to be completed in 2021, shows that large, sophisticated customers are turning to the vehicle, Morgan Stanley says.
Pepsi in December 2017 wrote one of the biggest orders for the Tesla Semi, reserving 100 vehicles. FedEx, Walmart, UPS and Sysco are among the other companies that have placed orders.
Morgan Stanley says the semi’s production schedule appears to be on track for 2020, and that Tesla should be able to compete with original equipment manufacturers.
Additionally, the firm says the push to “go green” will likely benefit the space as medium- and heavy-duty trucks account for about 7 percent of all emissions.
Tesla will report its third-quarter results later this month. Shares were down 30.4 percent this year through Friday,