Tesla could add billions in revenue by entering the trucking market, analyst says

Key Points

• Capturing just a small piece of the trucking market would lead to billions in revenue for Tesla, Morgan Stanley estimates

• The electric vehicle maker could also be a boon for trucking companies

Tesla's CEO Elon Musk
Odd Anderson | AFP | Getty Images

A high-tech Tesla semitruck could garner billions in revenue just by capturing a small fraction of the country's trucking market, according to one analyst.

While the automaker is already quite busy working on the launch of its Model 3 and the growth of its solar and energy storage business, Morgan Stanley analyst Adam Jonas says its announced entry into electric autonomous semitrucks makes "a lot of sense — maybe even more sense than passenger cars."

In a research note Thursday, Jonas laid out a few hypothetical scenarios showing how Tesla could enter the industry as a manufacturer, a service provider or both.

In one case, Tesla could become a truck manufacturer. If it can sell about 25,000 trucks a year, Jonas estimates the company could add $2.5 billion in annual revenue just by capturing 10 percent of the total U.S. new truck market. That would be worth about as much as selling 70,000 Model 3 cars at base prices, he said.

Jonas, who has written before about Tesla's potential to enter the shared car market, also said Tesla's move could be about building a service business.

For example, the automaker could sell trucks without batteries (lowering initial costs) and then offer a battery swapping service. (Tesla has, in fact, started a battery swapping pilot program for its cars, as a faster alternative to charging, but the company has not spoken much about it lately.)

That business could bring $7.5 billion in revenue, Jonas said. His estimates come a few days after Tesla CEO Elon Musk tweeted that the company will unveil the Tesla semi in September, around the time the Model 3 is supposed to enter volume production.

The automaker's anticipated entry into semis could also be a boon for trucking companies. Jonas estimates an autonomous electric version could save them 60 percent to 70 percent over conventional trucks, due to lower fuel, maintenance and insurance costs. If Tesla were to lease batteries at 25 cents per mile, Jonas estimates it would cut costs for truckers in half.

It would, of course, require a hefty investment. Jonas estimates Tesla would have to spend about $1.7 billion in capital upfront to supply both the trucks and the battery swap infrastructure.

Jonas is not the only analyst who predicts Tesla's truck business could be big. On Wednesday, Piper Jaffray analyst Alex Potter downgraded truck manufacturers Paccar and Cummins, partly due to the potential threat from the Silicon Valley carmaker.