Tesla’s Trucks Will Deliver Massive Profits For Investors

Written by Jason Simpkins
Posted April 13, 2018

Tesla launched its electric truck division, Tesla Semi, last November, and in the past few months, orders have been rolling in by the hundreds.

Delivery giant UPS was among the first companies to place an order, claiming 125 electric trucks from Tesla.

“For more than a century, UPS has led the industry in testing and implementing new technologies for more efficient fleet operations,” said Juan Perez, UPS’s chief information and engineering officer. “We look forward to expanding further our commitment to fleet excellence with Tesla. These groundbreaking electric tractors are poised to usher in a new era in improved safety, reduced environmental impact, and reduced cost of ownership.”

FedEx followed, though with a much smaller order of just 20 trucks. And TCI Transportation has ordered 50. Walmart, Anheuser-Busch, and Sysco have all placed orders, as well. In all, Tesla has logged over 500 reservations.

And this is just the beginning.

Consider, for instance, that UPS currently operates 108,000 delivery vehicles around the world. That means once its current order is filled, Tesla’s electric trucks will make up just 0.1% of its total fleet.

Let’s say UPS likes the trucks and decides to turn 10% of its vehicles electric. That would be nearly 11,000 vehicles, and $1.6 billion in revenue for Tesla. And that’s provided UPS purchases the $150,000 version of the vehicle, which has a range of 300 miles. A higher-grade Tesla truck with 500 miles of range costs $180,000 per unit. And the “Founders Series” is $200,000.

This is a lot of money we’re talking about but, as I said, it’s just the beginning. Tesla ultimately aims to produce 100,000 electric semis a year by 2023.

At a minimum of $150,000 per truck, that’s a $15 billion annual revenue stream.

jmm-runaway-semi-1

Tesla obviously won’t be the only company profiting, either.

Thor Trucks, a California-based startup, has also developed an electric semi that can haul 80,000 pounds of cargo and travel up to 300 miles on a single charge. It’s going to be competing with Tesla next year.

Other auto manufacturers could follow.

They’d be stupid not to. Demand for electric trucks is going to skyrocket as more and more companies come to realize the savings.

Comparing fuel efficiency of diesel trucks to a vehicle that uses no fuel is inexact, but electric trucks will get something close to 52 miles per gallon (about five times the MPG of the gas truck). And since EVs have fewer parts and fluids, maintenance costs are lower, too.

In all, operating costs for electric trucks figure to be 20% lower. And those savings will compound over the 20+-year lifespan of a truck.

There are other benefits, too. Electric trucks will drive quietly through streets, emitting minimal noise and no pollution. And they’ll get ahead of government regulation.

Indeed, France has already passed legislation that will ban the sale of gas and diesel vehicles by 2040. Other countries could follow with bans or fines of their own, penalizing the trucking industry.

So the market is not only present, but adapting quickly. Though, buying up pricey Tesla stock or battery manufacturers isn’t the best way to profit.

Investors would be better served focusing on raw material.

That is, the demand for lithium, cobalt, and above all, graphite is poised to soar in the years ahead. These are the key, essential elements in batteries and they’re blowing up in a big way.

Consider, for instance, that Tesla’s Gigafactory in Nevada is capable of consuming 115,000 tons of graphite a year all by itself. Yet, just 80,000 tons of graphite was produced worldwide last year.

The supply-demand imbalance is otherworldly.

It’s also something our resident resource expert and editor of Junior Mining Monthly, Gerardo Del Real, has written extensively about.

He’s also found an amazing investment opportunity that’s set to benefit from this unstoppable trend. It’s a company that produces every major battery component and it’s sitting right on the doorstep of a brand-new gigafactory.

So if you haven’t read about it already, check out Gerardo’s latest report right here.

Fight on,

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Jason Simpkins

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Jason Simpkins is Assistant Managing Editor of the Outsider Club and Investment Director of The Wealth Warrior, a financial advisory focused on security companies and defense contractors. For more on Jason, check out his editor's page. 

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