While I believe Tesla''s move to open its Supercharger network to other automakers is ultimately going to have a great impact on EV adoption, it is also a smart business move from Tesla.
Here''s the business behind Tesla opening its Supercharger network.
Tesla, to no fault of its own, has been using its Supercharger network as a moat in the North American EV market.
While most other automakers selling electric vehicles left the charging experience in the hands of third-party charging networks, Tesla built its own network, which is now widely recognized as the best, most extensive, and most reliable one.
It helped Tesla sell its electric vehicles and retain customer loyalty as Tesla owners would have a hard time going to another automaker and not being able to use the Supercharger network anymore.
However, Tesla never really intended to use the network as a moat. It simply happened as it developed its own charge connector early while the rest of the industry decided to go with the subpar CCS connector.
In 2022, Tesla ended up opening its charge connector, now known as NACS, to try to make it the new industry standard and North America. Over the course of the last year, all automakers ended up adopting the standard.
Ford was the first to get the ball rolling, and today, Ford EV owners are the first to get access to the Supercharger network. Soon, almost all EV owners in North America will be able to use the Supercharger network. First, with an adapter, but soon the NACS charge connector will be standard in all vehicles.
It wasn''t long ago that Tesla wasn''t even charging Tesla owners for using the Supercharger network. It was purely a perk meant to create a better experience for Tesla owners.
As the fleet grew, Tesla naturally started charging for Supercharger usage.
Now that Tesla is onboarding Ford EV owners on the network, we are learning more about the business behind it and Tesla''s approach.
Unsurprisingly, Tesla is charging Ford EV owners differently than Tesla''s own EV owners. Looking at the costs at different charging stations in the US and Canada, it looks like Tesla is charging Ford EV owners about a 30% premium per kWh of charging at Superchargers on average.
That can get expensive really quickly.
Tesla offers a solution. Non-Tesla EV owners, like Ford''s EV owners, can pay a $13 per month Supercharging membership to pay the same price per kWh as Tesla owners:
It''s not a bad deal. If you use the Supercharger more than once a month, you''ll probably save money by having a Supercharger membership.
There are currently over 2.5 million electric vehicles on US roads. Now, most of them are Tesla vehicles. So we can forget about the Supercharger membership for them.
But regardless, that number is expected to reach over 10 million vehicles by the end of the decade.
As a non-Tesla driver, I expect to use the Tesla''s charging network only if other viable, less expensive options are not available. I hope free market pressures will force the other networks to up their game to remain competitive. More reliable, well maintained, and numerous non-Tesla chargers would be great for us non-Tesla folks, and would also reduce the need for Tesla drivers to have to fight for space at their own chargers.
At that point, I can see Tesla selling Supercharger memberships to as many as 1 million EVs in North America alone. That would be a revenue of $13 million a month or $156 million a year, and that would likely only be a small fraction of its overall Supercharger revenues, which should be in the billions of dollars at that point.
I could see Tesla making over $1 billion a year in revenue just from non-Tesla EVs using the Supercharger network in North America by the end of the decade.
Globally, it should be three times that. Then, you include Tesla''s own EVs into the mix, and the Supercharger network is on a path to be a $10 billion business a year.
Last year, Wedbush estimated Tesla''s Supercharger network to be a $10 to $20 billion business per year by 2030.
Fred is the Editor in Chief and Main Writer at Electrek.
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Tesla''s (NASDAQ: TSLA) network of Superchargers enables Tesla owners to recharge their vehicle in as little as an hour, reducing range anxiety and improving the experience of owning a Tesla. The Supercharger network has grown steadily from around 1,500 stations in Q1''19 to over 3,250 stations as of Q3''21, and the number of connectors, which indicates the number of vehicles that can be charged simultaneously, has expanded from 13k to 29k over the same period.
View our dashboard analysis on A Closer Look At Tesla''s Charging Infrastructure for more details.
However, Tesla''s supercharger locations are growing at a slower pace compared to the number of Tesla vehicles on the road. As Tesla''s cumulative deliveries have grown from 320k in Q1''19 to 2 million in Q3''21, this means that the number of vehicles per connector has grown from under 47 to about 69 presently. This is a concern as it could increase congestion and wait times for customers. That said, Tesla is looking to fix this quickly. During a recent conference call, the company indicated that it wants to triple the size of its global supercharging network within the next two years, with the expansion focused on higher-demand areas. This will be crucial as the company has outlined that it intends to scale up deliveries at a compounded annual rate of 50% in the coming years.
Tesla is also beginning to view its charging infrastructure as a revenue stream of sorts. While the company previously offered free lifetime supercharging for its vehicles, it has largely removed this perk in recent years and customers of new vehicles need to pay for supercharging. Moreover, the company is also looking to open up its network of superchargers for other EV brands, launching a pilot program with 10 stations in the Netherlands earlier this month. Tesla is expected to charge a premium for charging non-Tesla vehicles.
[10/1/2020] Is Charging Infrastructure A Bottleneck To Tesla''s Growth?
Tesla''s (NASDAQ: TSLA) network of Superchargers enables Tesla drivers to recharge their cars in as little as an hour, reducing range anxiety and improving the experience of owning a Tesla. Below, we take a look at how Tesla''s supercharger network is expanding and compare its growth with the company''s cumulative deliveries and rival charging networks.
View our dashboard analysis on A Closer Look At Tesla''s Charging Infrastructure
Tesla''s Supercharger Network Is Growing, But Not Quickly Enough
How Does Tesla''s Network Of Chargers Compare With Rivals?
Tesla is still ahead of its rivals when it comes to fast charging - with a total of over 9,600 supercharger points in North America. In comparison, ChargePoint, an independent network of EV chargers, has about 2,020 DC fast charging points while Volkswagen''s Electrify America network has about 2,000 points. However, Tesla''s overall network, which includes fast chargers and slower Level 2 chargers stands at about 20k in North America. This is well behind ChargePoint which has close to 35k charging connectors. [1]
Further Buildouts, Battery Improvements Could Help Tesla Address A Shortfall
However, there are a couple of ways Tesla could address a potential congestion issue. The first and most obvious solution would be to build out more Superchargers. Tesla now has adequate capital to do so, holding about $9 billion in cash as of the most recent quarter. In addition to this, Tesla will likely count on improving the range of its new cars to reduce their dependence on chargers. Tesla can do this via more compact and cost-efficient batteries or other drivetrain improvements. For example, during its battery day event, the company said that its new "tabless" batteries could enhance range by 16%. See our interactive analysis How Tesla''s Battery Costs Impact Its Gross Margins for a detailed look at the economics behind Tesla''s batteries.
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