LDN - Business

PepsiCo makes biggest public pre-order of Tesla Semis: 100 trucks

[December 12, 2017]

By Eric M. Johnson

SEATTLE (Reuters) - PepsiCo Inc has reserved 100 of Tesla Inc's new electric Semi trucks, the largest-known order of the big rig, as the maker of Mountain Dew soda and Doritos chips seeks to reduce fuel costs and fleet emissions, a company executive said on Tuesday.

Tesla has been trying to convince the trucking community that it can build an affordable electric big rig with the range and cargo capacity to compete with relatively low-cost, time-tested diesel trucks.

Early orders reflect uncertainty over how the market for electric commercial vehicles will develop. About 260,000 heavy-duty Class-8 trucks are produced in North America annually, according to FTR, an industry economics research firm.

PepsiCo's 100 trucks add to orders by more than a dozen companies such as Wal-Mart Stores Inc <WMT.N>, fleet operator J.B. Hunt Transport Services Inc <JBHT.O>, and foodservice distribution company Sysco Corp <SYY.N>. Reservations to date are at 267 Tesla trucks, according to a Reuters tally.

PepsiCo intends to deploy Tesla Semis for shipments of snack foods and beverages between manufacturing and distribution facilities and direct to retailers within the 500-mile (800-km) range promised by Tesla Chief Executive Elon Musk.

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Tesla's new electric semi truck is unveiled during a presentation in Hawthorne, California, U.S. on November 16, 2017. REUTERS/Alexandria Sage/File Photo

The semi-trucks will complement PepsiCo's U.S. fleet of nearly 10,000 big rigs and are a key part of its plan to reduce greenhouse gas emissions across its supply chain by a total of at least 20 percent by 2030, said Mike O'Connell, the senior director of North American supply chain for PepsiCo subsidiary Frito-Lay.

PepsiCo is analyzing what routes are best for its Tesla trucks in North America but sees a wide range of uses for lighter loads like snacks or shorter shipments of heavier beverages, O'Connell said.

Tesla did not immediately reply to a request for comment.

Tesla unveiled the Semi last month and expects the truck to be in production by 2019.

O'Connell declined to say how much PepsiCo paid to reserve its trucks, when it placed its pre-orders, or whether it plans to lease the trucks or buy them outright. Tesla initially asked $5,000 per truck for pre-orders but that amount has since risen to about $20,000.

(Reporting by Eric M. Johnson in Seattle; Editing by Peter Cooney)

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