Billionaire Warren Buffett announced Tuesday plans to buy a major stake in one of the largest truck stop operators in the country as activists push for self-driving trucks to replace gas-powered semis.
Buffett’s Berkshire Hathaway bought a major stake in Pilot Flying J and will become majority owner within a decade. The truck stop has more than 750 locations in the U.S. and Canada selling gas and diesel fuel.
Pilot Flying J is the 15th largest private company in the country, employs more than 27,000 people, and rakes in annual sales of about $19.6 billion. Berkshire obtained a 38.6 percent stake in the company and expects to ratchet that stake to 80 percent by 2023.
“The company has a smart growth strategy in place and we look forward to a partnership that supports the trucking industry for years to come,” Buffett said in a press statement announcing the decision.
Billionaire Jimmy Haslam will keep a 50.1 percent stake in the company, and the wealthy Maggelet family’s FJ Management will retain another 11.3 percent ownership until Berkshire eventually takes a majority stake.
Buffett is known for his spot-on market forecasts and many Wall Street analysts refer to him as the “Wizard,” “Oracle” or “Sage” of Omaha, where Berkshire is headquartered. He is noted for adherence to value investing and for his personal frugality.
Buffett’s decision to tether his empire to Pilot Flying J indicates he doesn’t consider self-driving trucks a threat to traditional truckers – the move might be a bad omen for Tesla CEO Elon Musk, whose electric vehicle company is slated to begin producing over-the-road semi-trucks later this year.
Musk, who owns more than 20 percent of Tesla, said in April that the company will unveil an electric semi-truck in October. The event is currently set for Oct. 26 in the Los Angeles suburb of Hawthorne.
The so-called Tesla Semi Program is part of Musk’s Master Plan 2, which stated last July that the project will “deliver a substantial reduction in the cost of cargo transport while increasing safety and making it really fun to operate.”
“Worth seeing this beast in person,” Musk said in September. “It’s unreal.”
Some tech giants and activists believe Tesla’s plans could upend the freight hauling business, while others worry the Tesla semi-trailer truck’s battery would not be able to sustain the energy needed for over-the-road service.
The battery would need to be half the weight of the truck. The Tesla Semi would need a comically enormous 23-ton lithium-ion battery to power the 500-mile range most semis achieve, according to German engineering firm Siemens.
Tesla’s monstrous Nevada-based Gigafactory is unlikely to produce any batteries that size.
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