PepsiCo Looks to Scale Tesla Semi EV Operations Beyond California

Pepsico and Tesla took advantage of the main stage at the 2024 IAA commercial vehicle show in Germany on Sept. 17. The session focused on giving attendees an update on the deployment of Tesla Semi truck fleet operations.

Pepsico electrification program manager Dejan Antunovic and Dan Priestley, senior manager, Semi, for Tesla, started off by discussing both the benefits and challenges of electrifying PepsiCo's heavy-duty fleet.

Antunovic noted that Pepsico's initial project began in 2018-2019, focusing on sustainability and cost reduction, and has now blossomed to include15 Tesla Semis in Modesto, 21 in Sacramento, and 50 in Fresno. On average, he said, the trucks are achieving 0.8 kWh/km efficiency.

“It’s been a journey for us,” Antunovic said. “And we are now seeing electrification of the fleet provide a lower cost solution over time. The great thing is how well that has gone with heavy-duty electric trucks. We started with one site. And now we have begun to scale our operations. Now it's time to scale that across different geographies in North America.”

What Tesla is Doing to Drive Down Operating Costs for its Electric Semi Truck

Tesla's Priestley noted that Pepsico has been “incredibly” supportive and added that Tesla continues to work hard to drive down total cost of ownership for fleets.

“TCO is the baseline of every decision that we make,” he said. “Ultimately, every decision we makes comes down to, 'Is this going to be the right tool for the job?' We still want to make things fun. We want to make it a great experience. But at the same time, the underlying thesis that has to remain true is that it needs to be the lowest total cost of ownership.”

To accomplish those goals, Priestley said Tesla designers look at every little design in terms of materials or processes in order to drive costs out of the truck.

“We look to leverage the scale of other pieces of our business, where we can take componentry over,” he explained.

“Sometimes it's simple things. Like if you get into the truck, you'll see that we use the same screens that we do in some of our other cars. But also we carry over much more intricate bits, such as powertrain pieces.

"We get to leverage that validation, and that volume, in order to drive down the initial price to our customer.”

Tesla Treats Efficiency as a Design Philosophy for Semi Truck

The other important design criteria for the Semi truck is efficiency, Priestley said.

“We really pride ourselves at Tesla making the vehicle as efficient as possible,” he said. “And that really is the biggest lever for driving down costs.”

There are two reasons behind that thought process, Priestly explained.

“One is, when it comes to just the raw measurement and efficiency in terms of kilowatt hours consumed, we're directly driving down the amount of energy you need in order to continue to do the job,” he said.

“But also, when we look at it on a range basis, we need to be more efficient. It means that we get to remove a battery from the vehicle. And so that's a great lever in a way, to reduce the upfront cost of vehicle as well.”

But the process really starts with the initial design, Priestly said.

“Efficiency really informed the shape of the truck, and that informs the powertrain selection, everything we do along the way in order to continue to improve the vehicle and ultimately drive down the cost.”

And from there, he said, that philosophy extends through the rest of the vehicle design process.

“We look for areas that we can extract the most value out of our supply chain and drive down costs that way,” he added.

“But then also service maintenance. And we leverage our software, our vertical integration there, along with our inhouse service learnings from our passenger cars."

Using feedback from those servicing the BEVs in the field, he said, Tesla is able to "make [technicians'] jobs easier, get the truck back on the road, reduce service costs, keep part costs low, and ultimately deliver that entire idea of lowest total cost of ownership.”

Pepsico on Tesla Semi: Positive Feedback and Performance

From PepsiCo's point of view, Antunovic praised the simplicity and adaptability of the Tesla design. Feedback from Pepsico drivers and technicians has been overwhelmingly positive so far.

“To my surprise, the transition to the Semi has been a lot smoother and easier for drivers and has been really well received,” he said.

“I have a huge amount of respect for the folks that get up every day and deliver the goods that really make the world turn. And we don't want to get in their way. We want to make sure we have a product that not only do they enjoy driving, but they feel safe in operating — and also that we're not like wasting their time. We want to make sure they’re not wasting time charging.

"We don’t want a truck that they don't look forward to getting into. And so by giving them things like fast charging and a comfortable space to be in, we really get to maximize the driver's day, and I think we've seen that in some of the operations.”

In reality, Antunovic said Pepsico is really running three different heavy-duty fleets with the Tesla Semi.

1. Pepsi beverage trucks run in urban areas on routes of about 150 kilometers a day.
2. Pepsico also has a regional, longer-haul fleet that is run in slip-seat fashion that runs about 800 kilometers a day.
3. And on the Frito-Lay side of the business, Pepsico runs regional haul routes with about half the cargo weight compared to the beverage side of its operations.

“We've been able in really all three of those applications to prove that electrification can work for our business,” Antunovic said. “And what's very important for us is to have been able to demonstrate that heavy-duty EVs should and can mirror and replicate diesel operations.”