Can the Supercharger Network be profitable?

[tschmidty]

So this is a discussion I started on the Asheville supercharger thread that I thought deserved its own thread.

I think we are still at $200-250k for a standard 8 bay. That includes everything; materials, equipment, site work, landscaping, permitting, installation, etc.

Gotcha, so 25-30k each let's say, so call one year break even 300Kwh per day per stall on the high end, give or take orders of magnitude. So maybe 6 cars adding 50Kwh over a 24 hour period, call that 4 hours.

So lots of WAGs here, but it's hard to see how the SC network will not be a profit center at some point as X/S unlimited charging expires and more Model 3s are on the road.

The problem is that it sounds like you're unfamiliar with how commercial electricity is priced. It doesn't work the same way residential does, where most of your costs are related to how much electricity you use. For a usage case like a supercharger, the majority of the cost is going to be the demand charges, not the variable costs of the electricity itself. Yeah, they get a cheaper $/kWh price than the residential customers for what actually gets used, but that's likely missing 80+% of their bill for a sparsely used station.

I am aware of demand charges and obviously they are going to be high for a supercharger location but even at a sparsely used location they are almost certainly not going to be 80% of the electric charges. Even with demand charges, commercial power is cheaper than retail power. I also didn't factor ongoing maintenance, taxes or property leasing costs, it's called 'back of the napkin math'.

I am definitely not arguing that a sparsely used location is raking in profits for Tesla. I have no idea the average utilization of the supercharger network as a whole. My point being that the network could be managed as a self sustaining sector of the business in the future. I don't believe it is profitable now and I am certain that is not their intent.

I'd personally love to see Tesla deploy more 2/4/6 bay stations around towns in the future (not just on highways) since I think that would drive more usage but again you would need to analyze costs and usage so that could be completely impractical.

Anyone else have thoughts?

 

[acoste]

Those demand charges are steep as I read. Can't recall which station but they are adding battery storage to level out the consumption. Does the above station installation price estimate include some storage? Once everyone goes to high speed charging this will be a must, specially with the V3's 5 minute high power.

Other topic: there will be a massive investment in the electricity network during the transitioning to renewable sources. This will be reflected in the electricity prices. Also there might be additional tax on it (to cover the road/infrastructure maintenance costs). I don't know how that affects the operators' profit.

 

[supratachophobia]

Those demand charges are steep as I read. Can't recall which station but they are adding battery storage to level out the consumption. Does the above station installation price estimate include some storage? Once everyone goes to high speed charging this will be a must, specially with the V3's 5 minute high power.

Other topic: there will be a massive investment in the electricity network during the transitioning to renewable sources. This will be reflected in the electricity prices. Also there might be additional tax on it (to cover the road/infrastructure maintenance costs). I don't know how that affects the operators' profit.

Demand charges in our area are $6 per kwh. So an 8 stall charger could have a default reccuring cost of $3500 per month. That's before the actual electric usage.

 

[Uncle Paul]

Probably a challenge for Supercharger network to make a profit, as that was not it's original intent. It's purpose is to accelerate the acceptance of EV ownership.

Now that they are charging for juice and overstay charges, they will produce some income, but likely not a profit.

 

[cpa]

For the foreseeable future, Tesla will always have some sort of teaser in their sales models to provide for some complimentary Supercharging, even as the old Model S and X are retired from service that had free, unlimited. I presume the new Roadster with its hefty sales price will have free, unlimited Supercharging as part of the package.

In addition, there are a number of locations across the country where the landowner or chief tenant pays the electricity, and we are not charged. Yet Tesla likely still has to maintain these units.

Increased usage increases costs like preventative maintenance, repairs, replacements, and such. I do not see Tesla earning a profit from their Supercharger network. I think the best they can hope for is to cover their variable period costs, with depreciation, property taxes, and interest hitting the bottom line.

If--and this is a big if--Tesla can persuade competitors to use the Tesla standard for L3 charging, they might be able to earn enough income through licensing or other arrangements to bring their revenue up closer to break even.

Demand charges in our area are $6 per kwh.

Hate to pick nits, but demand charges are only in kilowatts, not kilowatt-hours. They are determined by the highest momentary draw from the grid during any 10 or 15 minute period during the billing cycle. These charges are not measured over a period of time, but rather measured spontaneously. But yeah, demand charges could become real expensive real fast.

 

[tschmidty]

Demand charges in our area are $6 per kwh. So an 8 stall charger could have a default reccuring cost of $3500 per month. That's before the actual electric usage.

So at an average of 300Kwh per day that's 7200 + 3500 so increases pricing to ~.15 per Kwh (using .10 per Kwh which is actually above the .07 average for commercial power). So with my napkin we are looking at 18 months now. Other fixed costs eat into that and everything is a WAG, but I still see busy superchargers as being able to make money for Tesla IN THE FUTURE. Not a lot of money but at least enough now that building out the network is break even as opposed to a loss.

One big thing is the busiest chargers are where the most cars are, ie. early adopters with unlimited supercharging. I doubt Tesla would ever release the numbers and even if it made money it would be a drop in the bucket for overall revenues.

 

[supratachophobia]

So at an average of 300Kwh per day that's 7200 + 3500 so increases pricing to ~.15 per Kwh (using .10 per Kwh which is actually above the .07 average for commercial power). So with my napkin we are looking at 18 months now. Other fixed costs eat into that and everything is a WAG, but I still see busy superchargers as being able to make money for Tesla IN THE FUTURE. Not a lot of money but at least enough now that building out the network is break even as opposed to a loss.

One big thing is the busiest chargers are where the most cars are, ie. early adopters with unlimited supercharging. I doubt Tesla would ever release the numbers and even if it made money it would be a drop in the bucket for overall revenues.

I guess the nice thing about heavy demand is that if you build in that fixed demand cost so you can split it among all who charge, it changes the cost per kw very little.

 

[tschmidty]

If you utilized 100% of the demand we assumed above it works out to costs of 42,000 for the usage, so the 3500 is now 8% of your energy costs as opposed to 50%.

 

[supratachophobia]

If you utilized 100% of the demand we assumed above it works out to costs of 42,000 for the usage, so the 3500 is now 8% of your energy costs as opposed to 50%.

So the rest should be easy to figure out your monthly costs based on 25/50/75% capacity every month. Basically, how many cars charged.