Tesla Inc (Nasdaq: TSLA) secured its largest order for its recently unveiled electric semitractor-trailers on Tuesday when United Parcel Service, Inc. (UPS) announced an order for 125 trucks to add to its delivery fleet.
UPS joins other high-profile Tesla semitractor-trailers customers like PepsiCo (PEP) and Wal-Mart Stores (WMT), but analysts aren’t convinced the Tesla Semi will make a major impact for Tesla investors.
UPS senior director for automotive maintenance Scott Phillippi says UPS will be evaluating the performance of the Tesla semitractor-trailers as part of its push to transition more to alternative-fuel vehicles.
“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, according to Reuters.
After unveiling the Semi last month, Tesla has taken pre-orders for at least 410 vehicles.
UPS will pay roughly $200,000 per truck for its purchase, and Tesla plans to begin deliveries starting in 2019. The Tesla semitractor-trailers come equipped with advanced autopilot features, can travel up to 500 miles on a single charge and can accelerate from 0 to 60 miles per hour in 5 seconds.
While the semitractor-trailers orders are good news for Tesla investors, the trucks will likely not move the needle much for Tesla for at least a couple of years. Bernstein analyst Toni Sacconaghi says the Semi could account for as much as 20 percent of Tesla’s total revenue by 2025.
In the meantime, the company has bigger fish to fry with its Model 3 rollout.
“We can’t help worrying that Tesla may be taking on too much organizationally – which could distract it from ensuring Model 3’s commercial success, which we believe is the critical driver of the company’s fortunes,” Sacconaghi says.
Tesla has already missed its own Model 3 production targets in 2017, citing production “bottlenecks.”
Last week, Tesla short seller and Kynikos Associates founder Jim Chanos said Tesla’s inability to deliver on its promises will ultimately result in its downfall.
“Three years ago, this company was supposed to be making money now, and now it’s supposed to be making money by 2020,” Chanos says. “I’m guessing by 2019, we’ll hear about 2025.”
Despite Tesla’s cash burn and uncertainties, the stock is…
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