What Does Daimler Trucks CEO Really Think About Tesla Semi?

Red Tesla Semi exterior front

JAN 14 2019 BY STEVEN LOVEDAY 54

Does this trucking expert love or hate the Tesla Semi?

Daimler is one of the world’s most prolific truck makers. So, we should truly consider the opinions of its top dog. Daimler Trucks CEO Martin Daum shared his thoughts on the Tesla Semi with Business Insider via (LMTonline) at the recent Consumer Electronics Show (CES) in Las Vegas.

Daum was honest to say that he believes the Tesla Semi is “fun.” He also finds Tesla’s competition as a serious concern. However, he’s well aware that Tesla’s entry into the trucking market is likely to be a challenge. The trucking industry for Daimler — and many rivals — is at a global level. While Tesla is a global company, paving a space in that market may prove difficult. Daum shared:

They’re fun [Tesla Semis], it’s an interesting market. We take every competitor seriously, Tesla has proved they really have the tenacity to really go through huge losses to capture the market.

But trucking is a difficult business. They will learn the hard way, trucking is not like passenger cars where one size fits all. There’s a lot of variety in trucking…the United States is a highly competitive market, so as I said, they’re fun.

Daimler sold over a half million trucks in 2018 alone, 176,000 of which it delivered in North America. Daum made it clear that the company will work to continue and increase such efforts, which matches up with the announcements we’ve read and covered as of late. He makes it clear that while Tesla should be seen as a viable competitor, it has much work ahead. He explained:

How do we survive? Because we run a global business. I don’t just look at the 176,000 North American trucks, I look at the more 500,000 trucks we sell worldwide… And that is a unit number you need to survive ultimately. Of all players in the North American market — Volvo, Navistar, in the association with the Volkswagen Group, and Paccar — we all have one big global footprint.

So for Tesla, it is a long way for it to get that. Not making fun of them, we take them seriously. In their niche, they could be successful, but to be ultimately the fifth player in the North American market, it’s a long way and we won’t make it easy for them.

Do you think the Tesla Semi will actually come to be and can secure a driving force in this industry? Let us know in the comment section below.

Source: LMTonline

Categories: Daimler, Tesla, Trucks

Tags: ,

Leave a Reply

54 Comments on "What Does Daimler Trucks CEO Really Think About Tesla Semi?"

newest oldest most voted

From article Daimler’s CEO Martin Daum said: “…But trucking is a difficult business. They [Tesla] will learn the hard way, trucking is not like passenger cars where one size fits all. There’s a lot of variety in trucking…the United States is a highly competitive market…”
————

I learned something new today… I didn’t realize for passenger cars on size fits all… go figure.

All this time I thought reason car makers made passenger cars in so many size & price variants was because one size did not fit all.

The snark is strong with this one today. Be funny, you will.

Surely “one size fits all” is more true for something like the Tesla Semi than for passenger cars? I’d assume a lot of things have to be standard and defined, so that any front end can couple up to any trailer, and weight, size etc have to meet certain criteria?

Maybe different when you talk about vans and smaller trucks, but that’s not what the Semi will be competing with.

Yeah, what he said is just bizarre. There certainly are different classes of semi tractors; there are Class 8 heavy tractors, which is what Tesla is planning on making; and there are lighter trucks, such as the lighter BEV semi truck which, as I recall, Cummins has shown as a prototype or at least a concept.

But since both tractors and trailers have to be interchangeable for the tractor-trailer system to be practical, there is a lot less variety among semi tractors than there is among passenger vehicles!

I get the impression that the Daimler CEO is trying to whistle past the graveyard. Certainly he has a point about Tesla not having any experience with the economics of commercial trucking. On the other hand, his claim that he finds Tesla’s Semi Truck to be amusing and “fun” reads a lot like hollow laughter to me!

But hey, at least he didn’t double down on a Daimler spokesman’s previous assertion that Tesla’s claims for its Semi Truck are “physically impossible”!

Yeah, I saw the same and questioned that statement…

Tesla is doing that with cars, or close, they’ve very few options even colors are just a few.

@Alex said: “Tesla is doing that [one size fits all] with cars, or close, they’ve very few options even colors are just a few.”
————

So that’s why Tesla currently has 3 size variants (Model S, Model X, & Model 3) in production and in-process of adding two more (Model Y & Roadster)… because “one size fits all”… got it.

Do you want me to tell you how many variants Mercedes have of their cars, SUVs, vans, …? If they say trucks take the costumization even further…

@Elex said: “Do you want me to tell you how many variants Mercedes have of their cars, SUVs, vans, …?…”
—————

Answer: According to Daimler’s CEO Martin Daum too many.

Nice job, there, of trying to change the subject rather than man up and admit you lost the argument.

I think he meant the extreme ability to customize trucks, with special equipment, add features from a lot of 3rd party suppliers.
If Tesla follow truck standards, and allow 3rd party companies to Mount cranes, shipping container lifts, mount snow plows or other equipment they’re ready for a full market.
If they want to haul boxes from customer 1, to customer 2 – I expect them to do fine in their niche segment.
I don’t expect to see the Tesla semi on ICE road truckers . .
Will they offer sleeper cabs?

@Johm Doe said: “…Will they [Tesla] offer sleeper cabs?
———

Yes

Well, according to GM and Ford, it is all trucks and SUVs, so 2 sizes fit all.

Does it really matter what he thinks?

Of course not. I mean, it’s not as if he has a position of power and influence in the worldwide trucking industry.

Does it really matter what he thinks about TESLA SEMI?

In the short term, no. In the long term, what Daimler and other semi truck makers might (or might not) offer as future competition to the Tesla Semi is going to matter a great deal.

He can’t tell the truth anyway. If he thought “We’re doomed – Tesla will take all our business” he couldn’t possibly say it or he would be looking for a job the next day and no one would buy a Daimler truck unless they had no choice – they’d just wait for the Tesla Semi.

These are the same kind of comments GM, Ford, etc CEOs made about Tesla when the Roadster and Model S came out. They are a niche company, they are new to the market, they will target a very small percentage of the population, they will have a hard time competing, etc. Then there was the one that I enjoy now, they are a small company, ask me again when they build 500,000 cars a year.

The Tesla semi “is fun.” I wonder if Daum could be more condescending and dismissive? Ignore at your own peril, every order for a Tesla is one less for Daimler- I guess that’s no big deal for them. Doubtful that Tesla will make it easy for them, either. Probably use the same approach they already do to compete with Mercedes on the EV car front- by making a better product.

Just a small side note: The “it’s fun” doesn’t really fit, I think. One thing to always keep in mind that information might get lost in translation (especially if a phrase is usually sarcasm in one language but not in the other). So it’s possible that he meant to say something else.

Right. Because that would be so out of character for an ICE manufacturer to say about Tesla..

Well, publicly Daum HAS to say these kinds of things, essentially ‘whistling past the graveyard’. But I don’t doubt for a second that in reality, Daimler underestimates Tesla, having worked with them before. If the Tesla semi comes in on spec and (nearly) on time, especially with regard to operating costs, the diesel numerical advantage will not mean a whole lot as far as fleet operators are concerned.

Hence the need for many players to not to take the transition and especially Tesla, lightly.

“If the Tesla semi comes in on spec and (nearly) on time”

Price is the real issue. Both upfront and electricity. Musk is playing the “forward pricing” game. He quoted prices in late 2017 he thinks he can hit in 2020-21. As usual, he’s way too optimistic.

I believe the $200k “Founders Series” trucks will have 300 mile range. They’ll sell handfuls of those to fleets for testing the first couple years. The $180k 500 mile version and 7 cent/kWh Megachargers will be “someday” products for many years, like solar-powered Superchargers and Solar Roof.

Tesla does not need to sell 500k trucks a year to be profitable, the legacy companies need to do so.

From article Daimler’s CEO Martin Daum said: “… how do we [Daimler] survive? Because we run a global business. I don’t just look at the 176,000 North American trucks, I look at the more 500,000 trucks we sell worldwide… And that is a unit number you need to survive ultimately…”
———–

That being the case…

Daimler is there also saying that Daimler Trucks can not survive if Tesla Semi eats into Daimler’s *must have* 500,000 trucks break-point volume.

Considering Tesla has thus far managed to successfully take respectable market share from each transportation category it has entered I’m thinking Daimler Trucks needs to find a way to lower it’s “must have” survive break-point and/or accelerate their EV program to compete against the upcoming Tesla Semi. Likely Daimler has at most 3-5 years to get that done which is not much time for a traditional heavy truck maker. Sounds like “fun”.

I don’t doubt Martin Daum’s claim that Daimler Trucks break-point is 500,000 trucks but I question his assertion that Tesla Semi can’t be successful at a lower volume break-point.

… continued

Tesla Semi tapping into Tesla’s EV consumer cars already existing volume production is a huge deal that Martin Daum’s seems to either not comprehend or conveniently ignores.

The genius of the Tesla Semi is that most of the Tesla Semi core componentry (battery modules, electric motors, control system software, etc) highly leverages economy-of-scale from Tesla’s already existing high volume consumer EV production:

Elon Musk said:

“…Most of that semi is actually made out of Model 3 parts by the way. It’s actually using a bunch of Model 3 motors, without revealing too much about the future of it, so we are able to use a very high volume vehicle, and then combine several motors to have (pause) I think it’s actually going to have a very good gross margin like…not something that the other…it’s like you can’t do that with a traditional truck. So effectively (the Semi-Truck) was just a very compelling product that has low unit cost.” source:

https://insideevs.com/tesla-semi-use-model-3-motors-interchangeable-parts/

“…not like passenger cars where one size fits all”
Really?

Daimler has gone from proclaiming the Tesla Semi to be “impossible” using the standard laws of physics, to now saying they are “fun”. Daimler is probably pedaling a lot faster underwater, than they appear.

“trucking is not like passenger cars where one size fits all.” – This sounds like he’s already preparing to tell investors about losses, to me.

When Tesla takes 10% of the market, he’ll be able to tell investors, “Like I said, it’s not one size fits all. Tesla has 10% but they’ll never get more because they only have one model. We’ll maintain what we have because we have more lines.”

Of course, it’ll be a dumb message to deliver because, surprise surprise, Tesla will satisfy more than 10% of the market with their one line and keep ramping production. And they will be able to introduce more variants as necessary to satisfy the full market. It’s not like Tesla will leave anything on the table for Daimler.

Look up the phrase, “Whistling past the graveyard”, and you’ll see Martin Daum’s picture and the illustrative quote, “They [Tesla] will learn the hard way, trucking is not like passenger cars where one size fits all. There’s a lot of variety in trucking…the United States is a highly competitive market, so as I said, they’re [Tesla semis are] fun.”

I know almost nothing about trucks, but this would tend to indicate that the variety in truck manufacturers and models is much smaller than the variety of car manufacturers and models:
https://www.statista.com/statistics/274937/market-share-of-truck-manufacturers-in-the-united-states/

The thing that he doesn’t realize is, when you make a diesel, gas truck, you aren’t going to put a car engine in it. So a lot of the design and cost can’t be shared with cars.

But that changes for electric where you can simply put in multiple motors in digital awd. Tesla’s platform uses the same batteries and same motors as they use in regular cars. This makes their production much more streamlined.

Martin Daum is the same guy who said “If Tesla really delivers on this promise, we’ll obviously buy two trucks — one to take apart and one to test because if that happens, something has passed us by,” and then said “But for now, the same laws of physics apply”. And then when someone mentioned this to Elon on an earnings call, Elon said he knew Daum and said his knowledge of physics was not very good at all. Haha now the same person is throwing shade around again.

Someone needs to show Daum what Tesla did in the passenger car segment. Being so lax will only set yourself up for a fall. And I will be laughing hard when Daimler lose a ton of business due to them not taking Tesla so seriously.

it doesn’t matter if tesla semi’s are fun, all that matters is if they lower TCO than other players, if they are truly 20% cheaper than a diesel truck, it is game over for daimler, nothing else matters. and thats without convoying. remember, they are trying to make rail economic suicide, if your business runs on making diesel engines, you only have 2-3 years to gtfo.

Based on what we see in passenger cars, there is about zero chance that it will be cheaper than a diesel truck. Tesla’s price point has been optimistic for all their models. Model S and X were supposed to be $50k, now with cancellation of 75 models they are about twice that.

it’s the running cost that trucking companies care about – that and maintenance. The initial purchase cost disappears into the noise after a decade of operation.

And yes, the original S pricing was much lower than what it ultimately became — but the operational costs are still rock bottom. Maintenance is still much lower than with an ICE. These are the factors that shippers care about, and in these areas Tesla will still come out on top.

Seems we have heard this about the Tesla roadster and then the S and then the X and then the 3. It just makes the old automotive companies seem so clueless.

I think Tesla has very good chances of making money in the truck business. Actually I think they can be more successful than with passenger cars.
This is more about running costs than building costs and that can make things easier for Tesla.
Time will tell….

love or hate..
Why does it have to be one or the other?

Tesla semi batteries have yet to be proven fast charging several times per day for years.

There are nothing to prove. Just look at s and x taxis. Semi charges faster because the battery is bigger.

Why do they need to be fast charged several times per day? Most trucks travel under 500 miles per day to begin with.

Yeah, his comment is an exaggeration. Even a Tesla Semi Truck that goes beyond its single-charge range on a daily basis isn’t likely to be charged more than twice a day. Let’s remember that Tesla will be offering two battery pack sizes, for nominal 250-300 mile range and for 500-600 mile range.

There are only so many hours in a day, and a trucking company trying to charge a Tesla Semi Truck 3x a day has bought the wrong truck for the job.

To pay back the trucks might be run 24/7, many semis run over 200,000 miles per year. They fast charge because time is money. Take an S/X then charge at 240 kW every day for 5 years, 200,000 miles per year, see how it goes.

They don’t need it run it 24/7 to pay back the costs. Not to mention, running it 24/7 does not mean going over 500 miles range per day. Such as inner city port to warehouse and local deliveries to stores.

An average truck travels only 59 miles. If we break that down even more, average private truck goes only 32 miles while average for-hire truck goes 214 miles.

But regardless, Tesla offers a 1 million mile warranty on the battery.

PS Remember, Tesla has quadripled the lifespan of batteries. Plus, it isn’t the fast charging that eats up lifespan but the heat, and Tesla has also improved their thermal management.

To add some statistics:

Total trucks = 5,521k

Off the road = 183k
50 miles or less = 2,942k
51 to 100 miles = 685k
101 to 200 miles = 244k
201 to 500 miles = 232k
501 miles or more = 293k
Not reported = 716k
Not applicable = 226k

As you can see, over 500 miles accounts for only 5.3% of trucks.

@SJC said: “To pay back the trucks might be run 24/7, many semis run over 200,000 miles per year…”
————-

Not even close…

I’d wager that there is not a single outlier use case of a Semi that “run 24/7… 200,000 miles per year”.

For semi (class 8 trucks) upper mileage for the few on the far right side of the bell-curve is 100,000 miles/yr with average being below 70,000 miles/yr. -source:

https://afdc.energy.gov/data/mobile/10309

Daimler is talking about scale. Tesla scales by using common components. Take four model 3 drive units, four to 8 battery packs, add sheet metal and wheels and drive away, quietly.

Daimler are already seiling an electric truck.
I’m sure they will be ready soon enough.

I hope Tesla semi sells enough to make a serious impact, and push technology forward.
There are a lot of all ready designed truck EV parts with a number of drive units.

Hope they speed up their work on the European version too, and understand the importance on parts logistics for the trucking industry.

“Daimler are already seiling an electric truck.”

But not a Class 8 heavy semi tractor truck. This CEO is talking about a wide variety of trucks, and is purposefully ignoring the fact that Tesla is targeting only the heaviest class of over-the-road semi tractors. Well… initially targeting, anyway! 🙂

Tesla isn’t trying to compete with all of Daimler’s trucks. Tesla is just aiming at the market segment where the most money is to be made on a single model.

Tesla is actually targeting the fixed repeatable route segment of the class 8 semi market. Because of the huge difference in upfront cost, Tesla has to seek out companies willing to hang onto the truck long enough to ever see even breakeven status. This is not a slam on Tesla, it’s just fact as they enter this market.

Daimler and Volvo are actually trying to get as close to parity on upfront unit cost while still delivering the EV savings during operations.

Two very different business models.

Most companies only hang on to their power units 3 to 5 years. You’d be half way through that with a Tesla before you ever saw any savings.

First, they ignore you, then they laugh at you, then they fight you, then you win.

That does, indeed, describe Tesla’s corporate progress quite well! 🙂