Good day,
During Tesla’s Q4 earnings call on Wednesday, Tyler Frank, a research associate with Robert Baird & Co., put Elon Musk on the spot about the future of the Tesla Semi. “How should we think about the Tesla Semi and investments needed there? And what do you guys think you can hit from an annual run rate in the next, let’s say, two to four years?” Frank asked. Musk dithered at first, saying that for Tesla and the 30% growth rate he promises, there’s a big difference between two and four years.
But then Musk got down to brass tacks: “These production curves, they look like an S-curve, where you have an initial exponential, which if the exponential appears – since people naturally tend to extrapolate on a straight-line basis, an exponential when it appears, the predictions are conservative in the beginning. And then the exponential takes off and it becomes linear and then it becomes logarithmic… So if you take four years, I think, 100,000 units a year is a reasonable expectation. Maybe more, but that’s the right—roughly the right number, I think.”
There you have it, folks. 100,000 Tesla Semis annually by 2022.
Did you know?
According to a new survey of manufacturers by PricewaterhouseCoopers, 86% of respondents say they are waiting for proven ROI before implementing autonomous mobility technology in their operations.
Quotable:
“The fourth area that we’re investing for long-term growth, even though it may be a temporary drag on short-term earnings, is technology, which is our secret sauce, which is our competitive advantage. And we’re now investing over $450 million a year in technology, and that’s benefiting our customers across the board.”
–Bradley Jacobs, CEO of XPO Logistics
In other news:
Amazon announces Prime members can get groceries from Whole Foods in 2 hrs, free shipping
Amazon reveals what its $13.7B acquisition of Whole Foods was all about: real estate for last mile delivery fulfillment. (Forbes)
Cargo thefts in Mexico more than doubled year over year
A total of 4,030 cargo thefts were recorded in Mexico in 2017, up 127% from 2016 and up 266% from 2015. 34% of thefts took place on the Mexico-Veracruz highway. (American Shipper)
Mercedes-Benz reveals the 2019 Sprinter in Germany
The high-tech new van for expeditors will be connected and electrified. (MotorTrend)
Legal challenges to the use of hair follicle drug testing
Large trucking carriers are asking the DOT to let them test drivers’ hair follicles for drugs, but the tests work differently for the hair types of various ethnicities (National Law Review)
Final Thoughts:
Truckload carriers had a great couple of weeks of Q4 earnings calls. The stock market may be undergoing a correction, or even beginning a bear market, but economic fundamentals—wages, unemployment, demand, capex—all look healthy.
Hammer down everyone!