PepsiCo expects Q4 delivery of Tesla Semi truck, but did anyone tell Elon Musk?

The company behind Pepsi soft drinks and Doritos chips expects to take delivery of the first heavy duty Tesla Semi trucks by the end of this year, but it might need to tell Elon Musk first.

That’s because the Tesla CEO has no plans to start series production any time soon despite initial plans to launch the zero-emissions commercial vehicle on the market by 2019.

That message apparently hasn’t reached PepsiCo’s chairman and chief executive, however. Speaking to Jim Cramer on CNBC on Monday from the COP26 climate summit in Glasgow, Ramon Laguarta said he would soon be receiving trucks from Tesla.

“We’re already starting to buy electric trucks actually—from Tesla, I don’t want to promote anybody, but that’s the brand we’re using so far,” Laguarta said. “We’re getting our first deliveries this Q4, so it’s something which started a few years ago [working with Tesla].”

In March, PepsiCo said it expected to receive 15 electric trucks later this year, which EV website Electrek reported were indeed the long-delayed Tesla Semi.

While it is fairly common within the truck industry to receive pre-series production models for pilot tests, it is important to note that these vehicles are neither economically built (even when it enters in production, the Semi is expected to have a minimum list price of $150,000) nor available in large volumes. Asked by Fortune to clarify how many trucks its CEO was referring to, PepsiCo did not respond to requests for comment.

Semi not a priority

Musk, the world’s richest person, has repeatedly pushed back the launch date of his battery-powered Semi ever since he first unveiled the concept version in November 2017.

Last month during the carmaker’s AGM, Musk cited multiple raw material shortages as the latest reason for a further delay, meaning production would only “hopefully” begin in the year after next.

“This year has been a constant struggle with parts supply,” Musk said. “So it really wouldn’t matter if we had the Semi or the Cybertruck or anything, we would not be able to make it. The Semi in particular needs a lot of cells, a lot of chips.”

That hasn’t been the only hiccup. In June the company announced the departure of veteran executive Jerome Guillen only three months after he was appointed President of Tesla Heavy Trucking.

Musk has also suggested building trucks was last on his to-do list for economic reasons. In January—prior to numerous freak occurrences in Texas and Japan that led to the auto industry’s acute chip crunch—Musk had already signaled he had no interest in building the Semi so long as he was constrained by a lack of 4680 battery cells.

Speaking to analysts and investors during the fourth quarter results call, the Tesla CEO said a Semi consumed five times as many cells as a passenger car, yet it could not be sold for five times the price. As a result, he would prioritize building a car before a truck.

A tough sell

Part of the reason Musk cannot demand a higher price for trucks might be the harsh economics of the logistics industry.

Unlike car buyers, companies purchasing a commercial vehicle look at it as an investment. That means the trucks need to deliver a certain return when all considerations such as energy bills, maintenance time and payload capacity are added up, the so-called “Total Cost of Ownership”. Those models that fail to meet these demands tend not to sell as well as those with a more competitive TCO.

The two approaches also differ in that car buyers also care about a manufacturer’s brand image, what status a vehicle might convey in social circles, whether its design is aesthetically appealing and other emotional factors less relevant to truck customers.

One reason why industry critics have been skeptical of the Tesla Semi’s appeal beyond pure PR benefits has been the lack of any data on its available payload.

Trucks create a lot of wear and tear on roads and therefore have a maximum permissible weight, including cargo, that is set by authorities. Compared to a tank of diesel fuel, batteries represent a significant amount of weight—which cuts into the amount of goods that can profitably be transported.

Rather than publishing information on this key criterion, Tesla used its 2017 Semi presentation to focus instead on the 20 seconds it takes its Semi to hit 60 mph from a standstill while towing 80,000 pounds. However, performance, handling and acceleration are not generally metrics that are important to truck customers. (Other Musk claims, like his guarantee the Semi drivetrain would not break down for 1 million miles, do play a role in purchasing decisions.)

That’s why manufacturers developing electric trucks warn the business will likely require subsidies to appeal to customers that do not otherwise place a high economic value on sustainability.

While much of the transportation industry still consists of firms with relatively small fleets that generate minimal profit margins, an increasing number of corporations are discovering the benefit of media-savvy announcements. Hertz recently garnered headlines worldwide only months after emerging from bankruptcy protection when it announced it would add 100,000 Tesla Model 3 sedans to its rental fleet.