Truck Stocks Rebound After Tesla Leaves Crucial Details Out of Semi Plan

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David Paul Morris/Bloomberg News

Tesla Inc.’s superstar chief executive Elon Musk unveiled a futuristic looking electric semi truck last week that surpassed analyst expectations and weighed heavily on the shares of truck and truck component makers.

But as analysts sifted through the finer points of  Nov. 16th’s glitzy announcement, the focus shifted to the questions that remain unanswered. For all of Musk’s talk about the cost advantages of the electric big rig over traditional rivals, Tesla didn’t disclose the price of the truck that is expected to go into production in 2019, nor did it say how much the truck weighs — both key considerations for a commercial buyer.

“Tesla cars don’t need to prove an economic case to their buyers, but Tesla trucks will — assessing the potential return on investment starts with price,” Stifel Nicolaus & Co. analyst Michael Baudendistel wrote in a note to clients dated Nov. 19, adding that “disclosing the vehicle range without the weight really tells us very little.”



Shares of Paccar Inc., Cummins Inc. and Navistar International Corp. rose Nov. 20, paring Nov.17’s losses, as all but one of the 13 stocks in the Russell 3000 Commercial Vehicles & Parts Index climbed. Meanwhile, Tesla shares slid as much as 3.1%, following a 0.8% gain on Nov. 17.

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Batteries used in electric vehicles are typically heavy, and in the case of a truck, can reduce the payload capacity. If the Tesla tractor with a 500-mile range carries a 10,000 pound battery pack, that would “almost certainly cut into the payload capacity of the truck,” according to Baudendistel. That’s even after discounting the comparable weight of a diesel engine, transmission and fuel in a traditional truck with an internal combustion engine.

According to Melius Research’s Rob Wertheimer, Tesla’s truck would provide a fuel efficiency that is the equivalent of about 19 miles per gallon, versus 10 miles per gallon achieved in current “best-in-class” trucks. That’s not enough to claim big fuel savings, he said.

And while the truck’s sleek aerodynamics won over some analysts and reviewers, Wertheimer points out that many of those features can already be incorporated in today’s trucks and are not, because price-sensitive truckers don’t want to pay for them.

UBS analyst Colin Langan doesn’t expect to see prolonged weakness in the trucking sector until more is known about the Tesla Semi.

“Given that the Tesla product is still not an obvious near term replacement for line haul sleeper trucks, we think there will be modest reaction pending further information,” Langan wrote in a note.