Donlen and LKQ worked together to secure four new Tesla Semis. Donlen’s extensive network of industry relationships allowed us to work with Tesla to set this deal in motion. The addition of the Tesla Semis is a significant event for LKQ as the new Tesla Semis are slated to positively impact their fleet.
“We leverage all our distribution centers within a 250 mile distance for every geographic market around the country, and the US and Canada have a webbed network that make runs to each other and back the same night. These runs are generally less than 4 hours one way, making the 500-mile range of the Tesla Semi the perfect application from a cost per mile standpoint,” said LKQ VP of transportation and salvage procurement, Yogi Shivdasani.
As a result of the new Tesla semi trucks, LKQ is expecting to see a reduction in downtime spent fueling. They plan to get two chargers for each truck and place them at the end points of each trip as the trucks typically spend about 30 minutes at each stop anyway.
In addition to making logistical sense, ordering the Tesla Semis makes sense from a cost-reduction standpoint. According to LKQ’s data, a normal diesel-powered unit with an expected useful life of 750,000 miles means it will take 125,000 gallons of fuel over its lifecycle for a total fuel cost of $312,000. The normal cost for an average diesel unit is $130,000. This means that acquisition and fuel costs combined would cost about $440,000 for just 750,000 miles of driving. Compared to that the acquisition cost of an electric unit around $220,000 means that LKQ will save 50% on acquisition and fuel costs.
Spend from idling will also be eliminated, which will not only decrease overall total cost of ownership but increase driver satisfaction as well. If the weather or climate is extremely hot or cold, a driver can stay idle and stay comfortable without any issue.
“On December 28 of this past year, we received calls for 7 diesel units where the fuel froze mid-route in the tank and they needed roadside assistance. Due to the weather in the Northeast and North Central, all towers were busy and our drivers were left waiting for several hours in the cold,” said Shivdasani. “I don’t think we will have fluid freezing problems with electric trucks if the batteries can run in that temperature, which doesn’t seem to be an issue for electric cars. That’s kind of a big deal at this time of year.”
Lastly, the introduction of electric semi trucks to their fleet will eliminate the use of diesel fuel, which will reduce the costs presented by fuel taxes. Not only would they generate hard savings from that, but they would also save cash on the IFTA management program for these vehicles.
Although the potential benefits presented by Tesla’s electric semi trucks may be significant, there are those who are concerned about the risks or unforeseen negative aspects of the new vehicles.
“The only question in my mind is the application of gearing the trucks for different terrain, which will be determined in the near future. However, the reliability and maintenance is a chance I am willing to take because I am certain that the trucking industry will move in this direction,” said Shivdasani.
Donlen’s efforts to obtain new Tesla electric semi trucks are poised to make a lasting impact on LKQ’s fleet. Not only does the introduction of the electric semis make sense from a logistical standpoint, but it also has the ability to significantly reduce various costs within LKQ’s fleet, including potentially saving around $200,000 in acquisition and fuel costs and eliminating spend due to idling, thereby decreasing overall TCO and increasing driver satisfaction, and generating savings due to the removal of the need to pay fuel taxes.