Tesla Supercharger network. Source: Tesla
It’s often passed off as just a bonus of owning a Tesla, but when you stop and think about it, the company’s vast global supercharging network is really quite special. No other car company has even attempted to build its own network, let alone make its own charging stations.
And with reliability problems plaguing other public charging networks, it’s worth stopping to reflect on this extraordinary achievement.
Morgan Stanley recently took a look at Tesla’s supercharger network to try to get an idea of its value. It says one of the big picture benefits of the network is that it gives people reassurance and confidence to make the switch to electric vehicles.
Tesla has become the dominant player in the super-fast charging market as it seeks to provide enough charging options for its global fleet, which will grow to around 5 million units by the end of 2023 to nearly 34 million units by 2030.
What’s the value of Tesla’s charging network?
“Tesla’s charging infrastructure solves one of the key hesitations consumers have about EVs and creates a network effect,” the analysts write. And it adds values to the Tesla stock.
“We think investors should appreciate the value in Tesla owners’ access to Superchargers and the synergies from the brand visibility of ~42k (and growing approx. 35% YoY) charging connectors across 4,700 stations globally.”
Morgan Stanley also notes that by opening up the network – currently at around 4,700 stations across the world – to non-Tesla EVs, which they have already started doing, the company could become “the gas station company” of the future.
“As we move to an all EV future, the demand for charging will increase. Coupled with the potential for Tesla’s innovation solving the biggest challenges of charging returns (capex, electricity cost) the option value could be higher than investors appreciate.
“It is our working assumption that Tesla will continue to open up its Supercharging network to non-Tesla vehicles.”
During its Investor Day presentation, Tesla provided details on Supercharger deployment and operational costs.
Tesla charging deployment costs. Source: Tesla Investor Day
With both hardware and deployment costs up to 75% lower than its competitors, Tesla has a huge advantage over over other networks as it rolls out its network, which is growing at 35% year-on-year.
Tesla has also significantly reduced its Supercharger operation costs (excluding power costs) over the last 2 years.
Tesla charging operating cost per kWh. Tesla Investor Day
Using software to optimise the utility of the network
The company has also used software to optimise its network.
Because the network is provides data on how many charging stations are in use at each site and because it knows how many drivers are on route to a particular station, Tesla has been able to redirect drivers to stations that have more capacity at various times of the day. This has resulted in a significant increase in daily kWh output per charger.
The company has been able to make further gains using software to incentivise charging duration during trips. During peak demand drivers are encouraged not to spend time fully charging to 100% unless the trip requires it.
Tesla Supercharger optimisation. Source: Tesla Investor Day
This optimisation of the network just through software means that Tesla needs to build fewer charging stations to service the same number of cars in the fleet.
The rollout of new version 4 chargers that significantly decrease charging times improves this ratio even further.
Tesla Supercharger Connectors and Vehicles per Connector Forecast. Source: Morgan Stanley
Morgan Stanley expects the number of Tesla vehicles per connector to increase from around 85 in FY22 to around 112 by 2030. That compares to a recent forecast by the Edison Electrical Institute that the US would require a ratio of around 188 vehicles per connector by 2030 to support their EV forecast.
Morgan Stanley believe that that Tesla will maintain and slightly increase its global charging network market share to just over 20% by the end of the decade.
Shareholder value and societal value
The Driven’s take: Morgan Stanley puts the value of the Supercharging network at around $US5 a share, but its true value is hard to put a price on.
Tesla’s charging network is often thought of as a perk but in truth it has played an enormous role in shifting the world’s perception of electric vehicles.
There’s no doubt that the ease and reliability of Tesla’s Supercharger network got many early customers over the line to make the switch to EVs.
And all those early adopters have helped accelerate the EV transition to a point where it’s now unstoppable. Potentially bringing forward the global shift to EVs by many years.
And with how important and urgent the transition away from fossil fuels is for the future of our beautiful planet, how can you put a price on that?
Keyword: The value of Tesla’s Supercharger network: Is it priceless?