Exclusive: PepsiCo will release 100 Tesla Semis in 2023, exec says

NEW YORK/SAN FRANCISCO, Dec. 16 (Reuters) – PepsiCo plans to roll out 100 heavy-duty Tesla Semis in 2023, when it begins using electric trucks to deliver deliveries to customers like Walmart and Kroger, the soda maker’s largest fleet official. to Reuters on Friday.

PepsiCo (PEP.O)which ordered large trucks in 2017, is buying them “outright” and is also modernizing its plants, including installing four Tesla Inc. 750-kilowatt units. (TSLA.O) PepsiCo Vice President Mike O’Connell said in an interview that the charging stands in both Modesto and Sacramento, California. The $15.4 million government grant and $40,000 federal subsidy per vehicle help offset part of the costs.

“It’s a great starting point for electrification,” said O’Connell, who oversees the company’s fleet of cars.

“Like any early technology, incentives help us build the software,” he said, adding that there were “a lot” of development and infrastructure costs.

PepsiCo is the first company to test battery-powered Tesla Semis as a way to reduce its environmental impact. Read more

United Parcel Service Inc (UPS.N) and food delivery company Sysco Corp (SYY.N) Trucks also booked, while retailer Walmart Inc (WMT.N) Experiment with alternatives.

PepsiCo plans to use Semis have been reported, but O’Connell provided new details about how the company will use them and the timeline for their deployment. Tesla CEO Elon Musk initially said the trucks would enter production by 2019, but that was delayed by battery limitations.

PepsiCo said it plans to deploy 15 trucks from Modesto and 21 from Sacramento. It’s unclear where the others will be based, but O’Connell said the company aims to roll out Semis in the central US next, and then the East Coast.

The company’s Frito-Lay division sells lightweight food products, which makes it a good candidate for electric trucks, which have heavy batteries that can limit charging capacity.

O’Connell said Simes will haul Frito-Lay food products for about 425 miles (684 km), but for heavier loads of soft drinks, the trucks will initially make shorter trips of about 100 miles (160 km). PepsiCo will then also use Semis to transport drinks in the “400 to 500 mile range as well,” O’Connell said.

“Towing a trailer full of chips isn’t the most difficult and daunting question,” said Oliver Dixon, senior analyst at the consulting firm Guidehouse.

“I still think Tesla has a lot to prove to the broader commercial vehicle market,” Dixon said, noting Tesla’s unwillingness to provide information on payload and pricing.

PepsiCo has some trucks planned for the Sacramento location to deliver goods to Wal-Mart and grocery stores like Kroger. (KR.N) and Albertsons Corporation (ACI.N). O’Connell said the trucks at the Modesto Frito-Lay plant have just gone to PepsiCo distribution centers.

All Semis going to PepsiCo will have a range of 500 miles (805 km). O’Connell added that he doesn’t know when Tesla will begin deploying 300-mile (480 km) trucks. When Tesla starts building them, he said, PepsiCo will “shift those up” in its fleet.

PepsiCo declined to release price details for the trucks, a figure Tesla has kept silent about. Competitors sell for between $230,000 and $240,000, Mark Parrott of Planet Moran Consulting said. He added that the Tesla Semi’s 500-mile range could be priced at a premium because its 1,000-kWh battery pack is twice the size of many of its competitors.

“We keep the trucks for a million miles and seven years,” O’Connell said. “Operating costs over time will pay off.”

The Gatorade maker declined to share details about the trucks’ weight, another closely guarded secret by Tesla.

He said Tesla not only helped pay for the giant chargers for the trucks but provided design and engineering services for the facilities, which come with solar and battery storage systems.

O’Connell said a 425-mile (684 km) trip carrying Frito-Lay products gets the Semi’s battery down to about 20%, and it takes about 35 to 45 minutes to recharge it.

(Reporting by Jessica DiNapoli in New York and Hyun Joo Jin in San Francisco; Additional reporting by Joe White and Siddharth Cavalli; Editing by Jonathan Otis and Rosalba O’Brien

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