There have recently been talks of Tesla sharing their supercharger network in Europe with
BMW, Mercedes and Volkswagen, particularly in Norway. But the supercharger network is
solely for Tesla cars currently. Elon has mentioned in past earnings calls that Tesla
would be open to sharing their charging network with other companies offering EVs.
Well Elon has now just said on Twitter, that Tesla are making their Supercharger network
open to other EVs later this year. He goes on to explain that this will indeed be for
all countries, over time.
So how do we feel about this? As a Tesla investor you are somewhat in two minds. One, you want
every advantage possible for Tesla to have over all the competition, so the company does
that much better than the other EVs. This would be investors wanting to have a larger
market share of the EV industry. But as investor you also have to think, is that really important,
wouldn't it be better if Tesla had a smaller share of a much larger pie. Remember Tesla's
larger market share, is only a very small fraction of the actual autos industry. The
EV industry potentially has about 50 times larger to grow, until it becomes 100% adopted
as the mode of transport. Therefore, perhaps it also in Tesla's best
interest as a company, to expand the industry that they lead, even if it potentially reduces
their market share.
Actually I think investors may have a little trouble getting their heads around this still.
The auto industry is enormous, Tesla barely has 1% of global auto sales yet, in fact that
is probably pretty close to what they are currently. Do you really think Tesla can grow
100 times more to cover the entire market? The market is huge, and it can't all be catered
to by Tesla alone. There is plenty of room for competition.
But the competition have this huge barrier to entry, with lack of decent charging infrastructure.
Tesla really dominates when it comes to the charging network and is often mentioned as
one of Tesla's major competitive advantages. Opening it up would remove that advantage.
So it could be seen as a negative to Tesla. But if it ends up growing the EV industry
in general, and turning more consumers away from ICE cars, then that will in turn increase
demand for EVs, and in turn Tesla.
Anyway, like I was saying, as a Tesla investor you have a somewhat conflicted view on the
future of EVs. Like I said we want everything that's best for the company, but the other
side, is what makes us different from the typical wall street fat cats, determined to
make a profit out of everything. Well a lot of Tesla investors invest in Tesla not just
for the potential of the company, but we invest in the future that we want to see in the world
and for our children. We want a clean future, therefore Tesla is preventing such a future
by monopolizing the charging networks, then that would not fit in line with the future
we want, it would also be a contradiction to Tesla's main mission to accelerate the
world's transition to sustainable energy.
But really, wasn't this going to happen anyway? At least in America, we know what a joke Electrify
America is, and that there are no other serious fast charging networks available, with no
mission or feasible business plan, other than Tesla's. Tesla chargers were going to continue
to proliferate through new locations at a much faster rate than any other potential
company. Eventually there was always a high possibility that the governments would eventually
force Tesla to open up their charging network anyway. At least this way, Tesla get to choose
just how they want to do it. With no anti-trust laws forcing it to occur.
The current path was not a tidy solution. Imagine if you bought a Ford and could only
fill up at Exxon, and then a GM could only use gasoline from Chevron. It would mean we
need so many more gas stations all over the place. Just like we would need that many more
EV chargers.
But actually what is really happening here, might not necessarily mean Tesla run the monopoly
of chargers, I think the bigger picture is actually that it will create a universal charging
standard. All future EVs and connectors could use the same charging type. Just in the same
way all gas station nozzles fit within every gas tank. Therefore, it would actually mean
that other charging networks and stations that are not Tesla's can also work for them
too. It makes much more sense, makes the entire network and infrastructure more efficient,
and better for the end consumer.
But will you be charged more for using a non-Tesla EV with a Tesla charger? Well obviously if
Tesla so choose they can give any Tesla owner a discount on charging at a Tesla charging
station, compared to charging a Volkswagen. But would that reflect badly on the Tesla
brand? Well it can obviously be argued that Tesla have been investing capital into building
this network, which meant sacrifices in other areas of their auto business. And now these
other EV companies don't have to invest in the capital.
Back in 2018 on an earnings call Elon said “We’ve always said that we’re — this
is not intended to be a walled garden, and we’re happy to support other automakers
and let them use our Supercharger stations. They would just need to pay the share of the
cost proportionate to their vehicle usage. And they would need to be able to accept our
charge rate or at least — and our connector, at least have an adaptor to our connector.
So this is something we’re very open to, but so far none of the other car makers have
wanted to do this. But it’s like not because of opposition from us. This is not a walled
garden.”
So therefore perhaps it could be interpreted that there could be a slight premium on non-Tesla
EVs to charge at a Tesla charging station, as a contribution to the capital expense,
in addition to the actual charging rate. The government may however have an issue with
charging different prices based on different customers. So we shall see, either way, I
would guess that Tesla's prices would still remain competitive to Electrify America.
It's not just the actual quantity and placement that is so good with Tesla chargers, but its
also a superior product, with faster charging speeds soon up to 350 KW, and growing. They
will also likely within time be accompanied by more solar and battery storage. Again more
perfect Tesla products to compliment the network. Tesla also have great charging spots often
with amenities while you wait.
Wow, what a life line the competition are given here. Particularly in the US, where
charging and long distance driving is a bigger deal. Now Ford and GM can come up with cars
that don't necessarily need as long a range, due to the charging network in place for them.
But wait, are they even going to accept this life line? Will the legacy autos even acknowledge
defeat and accept Tesla's vastly superior charging network?
Well lets think about it, obviously if this was the case, then every Ford EV customer
would have to download the Tesla app to use it for their charging. Ford's navigation system
would require a Tesla charging network plugin, so it can find all the nearest chargers available
for the driver. They would all have to admit that they couldn't run a successful EV business
without Tesla.
Now some of the other EV start ups, might not be as stubborn, and are happy to accept
this gift, perhaps Lucid and Rivian will, as its a really big deal for them. They need
all the help the can get here. But for the others, do they want their customers
interacting with Tesla apps in their phone and navigation, oh and stopping at Tesla station
to charge. Tesla would be the legacy autos number one competitor, so would they want
to stop all their customers going to Tesla charging stations to charge. Watching all
the Tesla's car owners charge their cars whilst they are relaxing watching Netflix, compared
to a Ford Mach E owner, just killing time on their phone, whilst their car charges at
likely a much slower pace.
Now what if Biden gets his EV plan to roll out, and is aiming for 1/2m fast chargers
around the US, if Tesla have opened up their charging network to any auto, then it would
make sense for the government to back Tesla's charging stations more than any other. I actually
don't understand the bottle necks to charging stations, they look simple enough to manufacturer,
and Tesla has a new factory in China, capable of making 10,000 a year.
But 500,000 is a lot more than 10,000. It would take Tesla 50 years for that factory
to make enough chargers for Biden. So that clearly wont happen, but perhaps the government
may subsidize Tesla to build some more charging stations. It would be a shame if the subsidies,
or whatever the incentives are, went to a different charging network. Not just because
I am invested in Tesla, but because Tesla seem to be making the best chargers.
I think overall I feel happy that this is happening, I think it much better that we
have a universal standard charging network, one way or another. Sure it will mean more
income for Tesla as more charging customers, but the charging revenue, was far from being
the make or break of the company, so I feel it will have a very minimal impact on profits.
If anything perhaps it will make more chargers feasible, possibly in more remote locations
where they were not previously. Thus improving the overall charging network.
And bear in mind we still have 100s times more EVs to come to the roads over the next
decade or so. We will need a lot more chargers in a lot more places, they will become more
and more ubiquitous. Which come to think of it, although its not
the make or break, when there are that many cars on the road, and Tesla does perhaps have
that large a market share, then it could still bring in significant revenue, but perhaps
$10 to 20 billion a year, compared to perhaps $1/4 trillion when Tesla are selling 20 million
a year.
I am really not sure if the legacy autos would actually be willing to let their customers
have so much association with Tesla, particularly when the legacy autos offer such inferior
EVs. More Tesla experience is not really want they want their customers exposed to. I think
its great for all EV companies, and Chinese ones too, that are not legacy autos. They
do not have the capital or cash flow for such large infrastructure investments, this would
definitely give them a leg up. And a huge advantage of over legacy autos too.
Why is every video I make end up having something about how difficult the future will be for
legacy autos. I think the world might be trying to tell me something.
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