PepsiCo Inc (NYSE:PEP) has reserved 100 of Tesla Inc's (NASDAQ:TSLA) new electric Semi trucks, the largest known order of the big rig, as the maker of Mountain Dew soda and Doritos chips seeks to reduce fuel costs and fleet emissions, a company executive said on Tuesday.
Continue Reading Below
Tesla has been trying to convince the trucking community that it can build an affordable electric big rig with the range and cargo capacity to compete with relatively low-cost, time-tested diesel trucks.
Several transportation firms are holding off on the Tesla for now, citing uncertainty over the time it takes to recharge compared to a diesel fill-up, range, and payload capabilities and how the market for electric commercial vehicles will develop.
About 260,000 heavy-duty Class-8 trucks are produced in North America annually, according to FTR, an industry economics research firm.
Navistar International Corp (NYSE:NAV) and Volkswagen AG's Truck and Bus are working to launch an electric medium duty truck by late 2019, while rival Daimler AG has delivered the first of a smaller range of electric trucks to customers in New York.
PepsiCo's 100 trucks add to orders by more than a dozen companies such as Wal-Mart Stores Inc, fleet operator J.B. Hunt Transport Services Inc (NASDAQ:JBHT), and food service distribution company Sysco Corp (NYSE:SYY). Tesla has at least 285 truck reservations in hand, according to a Reuters tally.
PepsiCo intends to deploy Tesla Semis for shipments of snack foods and beverages between manufacturing and distribution facilities and direct to retailers within the 500-mile (800-km) range promised by Tesla Chief Executive Elon Musk.
The semi-trucks will complement PepsiCo's U.S. fleet of nearly 10,000 big rigs and are a key part of its plan to reduce greenhouse gas emissions across its supply chain by a total of at least 20 percent by 2030, said Mike O'Connell, senior director of North American supply chain for PepsiCo subsidiary Frito-Lay.
PepsiCo is analyzing what routes are best for its Tesla trucks but sees a wide range of uses for lighter loads like snacks or shorter shipments of heavier beverages, O'Connell said.
Tesla declined to comment on its customers and potential customers to date.
Tesla unveiled the Semi last month and expects the truck to be in production by 2019.
O'Connell declined to say how much PepsiCo paid to reserve its trucks, when it placed the order, or whether it plans to lease the trucks or buy them outright. Tesla initially asked $5,000 per truck for pre-orders but that amount has since risen to about $20,000.