The Tesla Freight Network? It’s a guessing game – FreightWaves (blog)

Since everyones favorite game these days is guessing what is behind every move companies like Uber and Tesla are up to, it was likely only a matter of time before someone came up with the idea that Tesla could be building its own freight network. The key word being could.

Trent Eady, who advises buying Tesla stock and holding it long term, suggested in a Seeking Alpha commentary that a Tesla freight network is worth at least $10 billion in annual revenue based on a 1% market share but could eventually generate tens of billions or even hundreds of billions in revenue for Tesla.

Perhaps Eadys a bit optimistic, but he lays out his path to these billions, and it starts with a news flash Tesla semi truck. By now, most everyone knows that Tesla is building a big rig, expecting to debut it in September. Eady surmises that this truck will be the gateway to an on-demand freight network, much like Tesla has planned for passenger cars.

The freight network would launch in the early 2020s, Eady predicts.

In October [2016], Tesla announced the Tesla Network for passengers, an autonomous ride-hailing service that will compete with Uber, Eady writes. With Tesla now working on self-driving freight trucks, the logical next step is to develop a competing service to Uber Freight.

Eady also notes that this concept is tied directly to Teslas value, as the company is currently priced at a point only achievable by autonomous driving.

Contrary to popular belief, Tesla is not already priced for perfect execution of its strategy, he writes. That could only possibly be true if Teslas strategy did not include self-driving, which CEO Elon Musk has stated is the companys No. 2 priority, behind only the Model 3 launch. Self driving for passengers would likely grow Teslas market cap several times over. Self driving for freight represents another opportunity for growth that ranges from around a 20% increase in market cap at 1% market share and a several-fold increase at higher market shares.

Back to the freight model, Eady believes that Tesla is well positioned to dominate the market of self-driving, electric trucks. He bases this simply on the lack of competitors.

The economic rationalism of the freight trucking industry and the anticipated dramatically lower cost per mile of self-driving electric freight trucks means these vehicles will dominate the freight trucking industry, he says. No other company is known to be developing this kind of vehicle.

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The Tesla Freight Network? It's a guessing game - FreightWaves (blog)