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Tesla semitruck production has started, Elon Musk says

Yahoo Finance's Pras Subramanian discusses the production and rollout of Tesla's semitruck vehicle.

Video Transcript

- Welcome back. Tesla founder Elon Musk tweeted out last night that the company has started production of its long-awaited all-electric semi-truck and will make its first deliveries to PepsiCo in December.

For more on the story, we bring in Yahoo Finance's Pras Subramanian, Yahoo Finance's senior auto correspondent, to break down this latest news. And we didn't know this was coming this early. We saw the truck. We saw it break slightly in the demonstration.

But this big honking semi going to be rolled out by the end of the year. Is this just another one of those dates that we expect to be postponed? Or is this for real?

PRAS SUBRAMANIAN: Yeah, you know, welcome news for people that are looking forward to the semi truck. Is it an Elon distraction here? I don't know because it kind of came out of nowhere.

He had mentioned that the truck would go into production soon. We first saw it in 2017. So it's been over almost five years. And now he says not only is it starting production, going to be delivered to Pepsi on the 1st of December.

I reached out to Pepsi to get comment. I haven't heard back from them yet. But it's still a big deal for Tesla to get this semi out there.

It's a big space. Right? There's a lot of competition there between Daimler and Volvo and even Nikola. Right? So it's good that this truck is out there now and there's going to be some big tax incentives too. I think that's part of the deal why Elon wanted to push that out so fast.

- Well, you know, it's interesting too because Elon Musk has to raise, potentially, hundreds of millions of dollars just because of the higher interest rate environment. We know that he has to finance that Twitter purchase. Some people are estimating billions of dollars that have to be raised for this.

Meanwhile, Tesla is still worth as much as the entire European banking sector. So he does have a lot of collateral there. He has a lot of stock that he could sell. Just wondering your take on all of this and how it might fit together.

PRAS SUBRAMANIAN: You know, it's funny. It's just, the market is valuing the electric first movers so highly, so richly. We saw also Porsche now worth more than Volkswagen, which spun that out a few weeks ago.

So we're seeing the market really kind of reward that here. One thing I want to note, though, back to the truck stuff, is that there is going to be this $40,000 incentive for purchasers of these trucks, class 8 electric vehicles. So that's a big deal.

You couple that with, on the production side, the battery incentives are going to bring down the cost about a third. So you can see why this truck stuff is so huge.

And companies that are involved with that could be kind of a play here, potentially, for people looking to sell HSBC and getting to Nikola or Tesla. We'll see.

Well, hey, with all those rebates or credits, or what have you, if December is in fact a delivery date for a bunch of these, well, then they go on this year's books. So it could be an advance. Or it could be kind of a gaming the accounting.

But hey, if they get those trucks out there on the road, I'd be interested to see one as well.

We've got a minute here. You talked about that Porsche spinoff from Volkswagen. How is that going? And anything else in the EV space that you're looking at here?

PRAS SUBRAMANIAN: Well, it sounds like the Porsche spin off has gone quite well. The stock was up a lot yesterday. I think today must be down. But it seems like the market is rewarding that.

Porsche is going to have some more information on their electric platform. They're making a new platform where they can actually build a lot of these cars modular, like on this electric PP platform. So we're going to see about that.

I think they're kind of set up there for this next transition. And especially in Europe where we're talking about companies with slow growth and not much hype, Porsche was a huge story for not only IPO market but also the European equities market too.

- Yeah. I know Porsche was a huge IPO for them. Just haven't heard a lot. For that matter, we haven't seen a lot of IPOs in the US this year either. All right. Thank you for that report. Pras Subramanian.