Tesla has launched mass production of its electric semi-truck. Yet, its stock fell by 1.5%.
The vehicle, awaited for years, is hitting the road, but investors aren't exactly thrilled.
Tesla ($TSLA) states that its Nevada factory will reach a capacity to produce 50,000 Semis annually.
However, it remains unclear how many vehicles will be produced or delivered this year, or how much revenue the company will generate from them.
There is a long road between the factory's production capacity and actual revenue hitting the bottom line.
What the market is really curious about is how much money these trucks will eventually earn for Tesla.
Musk says they will soon bring their driver-assistance software to the Semi as well.
If the technology can truly evolve into driverless transport, a new revenue stream—beyond mere vehicle sales—could open up for Tesla.
A freight company’s calculation is straightforward:
How much does it cost to move cargo from point A to point B? How long is the vehicle in operation? What are the expenses for energy, personnel, and maintenance?
If Tesla can sufficiently lower this total cost, it could capture a portion of the resulting savings as a monthly software fee.
Morgan Stanley analyst Andrew Percoco’s projections are based on this very possibility: approximately $15,000 in monthly software revenue per driverless truck. In a successful rollout scenario, that amounts to $17 billion in annual revenue by 2040.
Note: These are not current earnings, but an analyst's future projections.
There are still issues regarding technology, safety, regulatory approvals, and commercial success that need to be resolved.
Still, it is an idea worth watching. There is a significant difference between making a one-time profit from selling a semi-truck and earning money every month for as long as that truck hauls freight.
In other words, alongside the number of trucks produced, it is also necessary to track the savings generated for the customer and how much Tesla can earn from those savings.
Musk is skilled at articulating the future.
Now, that future needs to be translated into profit.
