Tesla Semi trucks are in short supply for PepsiCo as rivals use competing electric trucks.

Tesla’s major customer PepsiCo made an early payment for 100 Tesla Semis in 2017, with plans to use a fleet of electric trucks to deliver Cheetos, Lays chips and Pepsi sodas to retailers.

But according to the food and beverage maker and one of its executives with knowledge of the program, PepsiCo was using only 36 of the 100 electric trucks promised by Tesla this month.

The shortfall, which has not been previously disclosed, highlights the challenges Tesla faces in becoming a top-tier player in the automotive industry. Other potential Tesla customers, including food distributors Sysco, UPS and Walmart Canada, continue to wait for Tesla Semi trucks and are turning to competing electric truck manufacturers.

The difficulty in shipping enough Semis comes at a bad time for Tesla, which has seen growth in its consumer electric vehicles slow, forcing it to cut prices and scale back. In addition, Reuters reported this month that Tesla decided to cancel its low-cost car that investors had hoped would spur growth.

Diesel-powered 18-wheelers are a major source of pollution. When companies commit to reducing their greenhouse gas emissions, Tesla’s proposition is clear.

“People may ask why create a semi-truck,” Musk said at the automaker’s gigafactory in Sparks, Nevada, at the end of 2022, when Tesla presented a semi-trailer to PepsiCo. that use electric trucks are eligible for a large subsidy to offset their purchase of $20 million to cover the cost of the Semi 32, as well as a government subsidy of $40,000 per vehicle.

Tesla, which will release its quarterly results on Tuesday, did not respond to a request for comment.

A PepsiCo spokesperson said in a statement that the company’s Semis plans may change based on technology and the need to establish infrastructure.

The soda and snack maker was the first in America to take delivery of one of Tesla’s highly anticipated Semi trucks. “The 100 (Tesla Semi) that we will deposit will definitely be delivered on the 23rd,” Mike O’Connell, vice president of the chain, said at the time of PepsiCos supply, to the Reuters agency.

But, as of this month, PepsiCo is “focusing on how best to operate the 36 vehicles that are currently in our fleet,” a spokesperson told Reuters earlier this April. That’s the same amount that PepsiCo began using to move products from its Modesto food processing plant and its Sacramento bottling site, PepsiCo executives said.

Tesla has been looking to get into truck manufacturing for years.

Tesla had said it would put the Semi into production by 2019. In October 2022, Musk told investors his goal was to make 50,000 Semis by 2024. Tesla finally unveiled the Tesla Semi truck in late 2022.

But in June 2023, Musk told an energy conference that “there aren’t enough batteries” for Tesla to achieve “volume production” of the truck, not counting the number of Semis that would represent. He said Tesla will reach volume production in 2024 “when the battery problem is solved.”

Svein Sollie, director of transportation at ASKO Norway, the logistics arm of Norway’s largest food retailer NorgesGruppen, used his personal credit card to make a down payment on 10 Tesla Semis in 2017, but never received it.

“We’re not happy with Tesla’s situation,” Sollie said. “(It’s) almost seven years now, it’s a long time to wait.

UPS booked 125 Tesla Semis in 2017, one of Tesla’s largest orders at the time. A spokesman for the package delivery company told Reuters on April 16 that it is “working closely with Tesla to determine the date we will pick up the truck,” but declined to provide further details.

Meanwhile, UPS, Walmart Canada, Sysco and Schneider National, a shipping company that works with PepsiCo’s Frito-Lay, said they were turning to Daimler Trucks, maker of the Freightliner eCascadia. The four companies said they have begun putting dozens of eCascadia electric trucks on the road.

The range of the eCascadia is about 230 miles, while the Tesla Semi can go about 500 miles. Schneider said it uses about 100 eCascadia trucks to deliver products, including PepsiCo’s Frito-Lay products.

Daimler Truck North America said eCascadia is used in more than 55 different company fleets.

Tesla has a fleet of nearly 100 Semi trucks that travel between its plants in Fremont, Calif., and Sparks, Tesla chief executive Lars Moravy said on the broadcast of Jay Leno’s reality TV show Garage last December.

Additionally, logistics provider Martin Brower reported on its website that it used two Tesla Semis to transport its restaurant customers earlier this year, as part of a pilot project. He did not respond to further requests for comment.

During Tesla’s quarterly earnings call on January 24, Andrew Baglino, an executive who has since left the company, said Tesla recently began expanding its Nevada factory to manufacture the Semi. In March, Mr. Musk said “it would also make sense to build Semi in Europe” at the company’s factory outside Berlin, according to © media.

PepsiCo’s chief sustainability officer, Jim Andrew, said in a recent interview with Reuters that PepsiCo was working to build the infrastructure needed to support electric fleets, including workers capable of maintaining the vehicles and electrical networks capable of charging them. .

“You’re talking about a system,” Mr Andrew said. “All these items have to be installed before launching the ship.

A PepsiCo spokesperson said the company will supply additional electric vehicles from different manufacturers as they become available.

Green Century Capital Management, an investor in PepsiCo, is skeptical about the timing of Semis’ deployment.

“The fact that they are behind schedule is concerning,” said Andrea Ranger, shareholder representative at Green Century. The investment firm has tracked PepsiCo’s use of electric vehicles and is pushing the company to consider its impact on biodiversity at its annual meeting in May.

In Europe, ASKO Norway uses electric semi-trailers from Scania and Volvo while waiting for Tesla, according to Mr. Sollie. He said Tesla told him Tesla was prioritizing delivery of the Semi to Pepsi and other US customers (Reporting by Jessica DiNapoli in New York; additional reporting by Nick Carey in London and Hyun Joo Jin in San Francisco; writing by Alistair Bell)