Last month, Tesla unveiled two brand new electric vehicles to its product line. The Roadster and the Semi Truck. The United Parcel Service (UPS) on Tuesday placed an order to buy 125 Semi Trucks from Tesla making this the largest order to date.
This move by UPS helps the company grow its own fleet of alternative-fuel vehicles, according to Reuters. Elon Musk’s company is trying to compete with time-tested diesel trucks. Tesla’s Semi Truck is expected to go into production by 2019.
The cost of the Semi Truck is $200,000. The UPS order total is approximately $25 million. This investment by the delivery company is an attempt to lower the total cost of ownership from conventional vehicles.
Quietly, Tesla is building customer preorders since last month’s announcement. Other companies with preorders are Walmart, Food Service Distributor Sysco Corp. and operator J.B. Hunt Transport Services Inc.
UPS is not the only company to have ordered more than 100 Semi Truck units. Firstly, PepsiCo Inc. had held the highest preorder with 100 Semi Trucks.
For this large preorder, UPS went ahead and released data to Tesla about how the trucks need to function. In other words, with releasing information about its real-world routes it can assist Tesla with manufacturing the trucks with the specs the UPS fleet precisely needs.
The UPS Senior Director for Automotive Maintenance and Engineering for International Operations, Scott Phillippi, said the in the press release that with the arrival of new technology to its fleet they needed to make sure they are in a position to succeed. Phillippi went on to explain that these models would be used primarily in routes in the United States (U.S).
As of today, the total number of preorders for Tesla is 410 Semi Trucks. When the Semi Truck was revealed at the SpaceX headquarters in November, analysts began to express concerns with the addition of these two vehicles. Furthermore, with substantial business expenses, Tesla has plenty of financial pressure on its plate.
Tesla preorders have been limited to the U.S. However, for Tesla to expand it will need to pitch this line of electric trucks elsewhere. As stated by Electrek, the company will be opening reservations to a few European markets.
“During a presentation in the Netherlands last month, Jerome Guillen, Tesla’s Vice-President of Trucks, said that the company is currently undergoing development adapting the Tesla Semi design to European trucking regulations.”
Some trucking companies did not have to wait for Tesla to begin accepting orders of the Semi Truck. The above news report confirmed that an Italian trucking company, Fercam, announced that they had ordered a truck and would be brought to Europe. And they managed to bypass the reservations process by utilizing their U.S partner MAO Inc.