How will luxury brands compete with the Supercharger network over the next 3-5 years?

[Yitt]

What do you think about the capacity of the SC network once the 3 comes out? We are already seeing occasional backups on heavy travel days. I'm concerned what that's going to look like once the Gigafactory is up and running and the production numbers really ramp up. The obvious answer is to build more superchargers, and I know they're coming, but do you have a sense whether supply can keep up with demand?

Edit: looks like techmaven addressed this while I was posting. Very interesting to see how it will go! Certainly I agree that widespread availability of non-Tesla chargers will be essential.

 

[jaguar36]

What do you think about the capacity of the SC network once the 3 comes out? We are already seeing occasional backups on heavy travel days. I'm concerned what that's going to look like once the Gigafactory is up and running and the production numbers really ramp up. The obvious answer is to build more superchargers, and I know they're coming, but do you have a sense whether supply can keep up with demand?

Edit: looks like techmaven addressed this while I was posting. Very interesting to see how it will go! Certainly I agree that widespread availability of non-Tesla chargers will be essential.

The vast majority of superchargers are empty most of the time. Its only a handful that are regularly backed up. Also keep in mind that its highly unlikely that all Model 3's will come with supercharging enabled, and its probable that it won't be free for them. They've also got another year or two to get even further ahead of the curve. If they continue at their current rate that will almost double the network.

 

[mikeash]

I think the traditional manufacturers are too stuck in the old ways of doing things. GM and Mercedes and all the rest don't own or operate gas stations, right? They build the cars, others build the fueling infrastructure. I think they think the same about EVs. They build the cars, others build the charging infrastructure. I think their vision of long-distance travel in their EVs is that you use third-party fast charging stations along your route.

If you have no experience actually driving long distances in an EV, then this probably sounds reasonable. Pull up a map of CHAdeMO or CCS stations in the US and it looks decent. There are pretty big gaps, but many major corridors are covered well. Nobody is driving cross-country on these yet, but given a little more time, it could fill in.

We all know the problem with just looking at the map, like this. These stations tend to be installed in single units, making them vulnerable to breakdowns, ICEing, or queueing. The owners often don't care about them and leave them broken needing repairs for long periods. Some are at dealers that refuse to let any car charge if not purchased from them. Some are ridiculously expensive. Some are limited to painfully slow charging rates like 25kW. Many of them are in stupid places, like car dealerships with nothing around. Some are inaccessible You can use them for travel, but you have to be careful to do extensive research and have a solid backup plan. But if you're an executive at a major car manufacturer who's never touched an EV outside of your labs and you're just looking at the maps, it probably looks fine.

Certainly, given the relatively low costs involved, major car manufacturers could decide to roll out a Supercharger-equivalent network in pretty short order, and definitively solve the problem. I just don't think they will. They're going to sell the cars, and give some lame information about third-party charging stations, and maybe even get their dealers to install (single, crappy, unreliable, hard to access) chargers... and wonder why their customers make long-distance trips at one tenth the rate Tesla owners do.

 

[1101011]

Not something I've encountered with superchargers:

Also, I think if GM decided to implement a system of chargers, they would be inclined to place them at dealerships instead of Tesla's model of (rather) efficient access near interstates...

 

[electracity]

I think the traditional manufacturers are too stuck in the old ways of doing things. GM and Mercedes and all the rest don't own or operate gas stations, right? They build the cars, others build the fueling infrastructure. I think they think the same about EVs. They build the cars, others build the charging infrastructure. I think their vision of long-distance travel in their EVs is that you use third-party fast charging stations along your route.

If you have no experience actually driving long distances in an EV, then this probably sounds reasonable. Pull up a map of CHAdeMO or CCS stations in the US and it looks decent. There are pretty big gaps, but many major corridors are covered well. Nobody is driving cross-country on these yet, but given a little more time, it could fill in.

We all know the problem with just looking at the map, like this. These stations tend to be installed in single units, making them vulnerable to breakdowns, ICEing, or queueing. The owners often don't care about them and leave them broken needing repairs for long periods. Some are at dealers that refuse to let any car charge if not purchased from them. Some are ridiculously expensive. Some are limited to painfully slow charging rates like 25kW. Many of them are in stupid places, like car dealerships with nothing around. Some are inaccessible You can use them for travel, but you have to be careful to do extensive research and have a solid backup plan. But if you're an executive at a major car manufacturer who's never touched an EV outside of your labs and you're just looking at the maps, it probably looks fine.

Certainly, given the relatively low costs involved, major car manufacturers could decide to roll out a Supercharger-equivalent network in pretty short order, and definitively solve the problem. I just don't think they will. They're going to sell the cars, and give some lame information about third-party charging stations, and maybe even get their dealers to install (single, crappy, unreliable, hard to access) chargers... and wonder why their customers make long-distance trips at one tenth the rate Tesla owners do.

I think they have no intention or making a free network. But a group of companies will find a way to cooperate on funding a large CCS network. At the Bolt release there was an odd quote from a GM EV exec:

"We believe all our customers should benefit from any infrastructure spending."

I don't believe "all our customers" is referencing ICE. I believe she meant a dig at Tesla, saying the majority of supercharger users pay for the heavy use of a few. I am almost certain GM will not ever build out the network alone or with free charging.

I believe the most likely future is an "Everyone Except Tesla" network that will begin to be built out in 2017. The tricky part may be that the optimal timing for each player is different. Long term the group would probably look at the effort as a revenue producer. It should be fine with the big manufacturers if all the customers highly motivated by "free" charging buy a Tesla.

Presumably none of these companies benefit from further accelerating EV interest, so the initial rollout will be interesting.

 

[Olle]

Yet another possibility beyond other manufacturer paying for access: Carmaker or consortium of carmakers pay significant part, maybe 1/2 or more of the total Supercharger investment and TCO and in return get access and make it brand neutral (Tesla name removed) or their name(s) added so it would say Tesla and another brand(s) on all SC.

 

[electracity]

Once SAE gets around to finalizing a real L3 DC charging standard, I think the situation changes a lot.

Right now, the CCS plug standard is limited to 200 amps. They then use 500 volts x 200 amps to claim 100 kW. But we all know that realistic pack voltages are 300-400 volts, so realistically EV's could charge at 60-75 kW off these 100 kW EVSE's if they could tolerate the c-rate. Right now, only the Bolt might be able to actually handle charge rates higher than about 75 kW. Therefore, the current CHAdeMO and CCS networks are really destination charging networks or urban commuter charging networks instead of really long distance charging networks between the vehicles available and the plug standard. After all, it is hard to install chargers in locations where the current crop of vehicles are not likely going to make it there in significant numbers.

For the automakers, they'd rather see that people are buying a vehicle like the Bolt in big numbers before investing $100s of millions into a charging network. Further, unless there is agreement amongst the automakers of a fixed equal contribution, why would GM sponsor BMW's charging? Or Nissan sponsor Kia's? Certainly not in a big way. So they take a bit of marketing budget to light up some corridors and most of that money goes into setting up chargers at dealerships that have some brand affiliation associated with that expenditure.

I think once the next CCS standard is finalized and equipment is available, then NRG eVGo, ChargePoint, SEMA, etc. can then whole heartedly install L3 chargers with the knowledge that upcoming vehicles will use them. The payback period stretches much further into the horizon. But the timing is more like standard finalization in 2017, equipment availability in sometime late 2017, 2018 model year cars might start to have it, so widespread deployment in 2018 to 2020.

If you look at 2018 or 2019 as years where the current 200 amp CCS plug looks dated like the 20-24 amp Blink J1772 network, then why put a lot of money today into such a plug standard? The ROI certainly isn't there. And CHAdeMO is likely to die regardless of its early lead in the L2 DC charging space. Both CCS and CHAdeMO have to start over at 0 installs of L3 EVSEs.

It will be interesting to see this shakes out in 2018. Will one buy a 2019 BMW, GM, VAG, or other product with a nascent CCS network or a more fully developed Supercharger network? When will Tesla make a CCS v2 adapter, or possibly even switch over, especially in Europe? Will Nissan/Kia/Mitsubishi be forced to CCS v2 in Europe and therefore eventually be forced by the market in the U.S.?

That's a great analysis. But I wonder if the buildout of L3 by third parties would be too slow to satisfy the need to sell luxury EV by Mercedes and BMW. Automakers could bankroll chargepoint, I suppose. But they might all consider the long term possibility of turning what is a cost center for Tesla into a profit center for themselves.

Figuring Apple into charging scenarios is also very tricky. Apple can't/won't test the EV "waters" with a low volume EV. I don't see their approach being one that hopes market economics will take care of travel charging.

 

[AmpedRealtor]

The cost of the Supercharger network is a rounding error on the balance sheet of companies like BMW, Volkswagen, Mercedes, etc.

You don't think that any of Tesla's potential competitors could put together a national charging network inside of a year by throwing a bunch of money at it? Of course they can, and they can do it faster than Tesla. The Supercharging network is a differentiator today, but it may not be in 1-2 years if a BMW or Mercedes wanted to accomplish the same goal. The CCS/Combo standard, which is favored by the Germans, can provide up to 100 kW of power. While not quite as high as a Supercharger, it's not off by much and could very easily form the basis of a national network by any of the big players.

The Supercharger network is not a reason for complacency. The advantage could disappear almost overnight in this business. That's probably why nobody has expressed interest in joining the network. Why bother when you can build your own?

 

[techmaven]

The vast majority of superchargers are empty most of the time. Its only a handful that are regularly backed up. Also keep in mind that its highly unlikely that all Model 3's will come with supercharging enabled, and its probable that it won't be free for them. They've also got another year or two to get even further ahead of the curve. If they continue at their current rate that will almost double the network.

There are about 100,000 Supercharge capable cars on the road today and about 60,000 of them are in the U.S. Right now, in the U.S., there are 249 Superchargers. I'd say the vast majority of them are significantly underutilized, even relative to peak times. The book value of the Supercharger network was $152.4 million as of Sept 30, 2015 (which includes under construction Superchargers). They state that they will spend about 5% of their capex on the Supercharger network, which I think is an aspirational amount. In 2015, their capex was $1.7 billion, so about $85 million on the Supercharger network. Assuming the U.S. is about 30% of expenditures, that's $25 million spent on the U.S. Supercharger network in 2015 and let's assume that it rises at the same level of sales growth, or roughly 40% per year. By the time the Model 3 ships, that's another 2 years of expenditure, or another $84 million, bringing the U.S. Supercharger network to $158 million book value versus $74 million today. A little more than a doubling.

In some locations, that's expanding the number of plugs per station. At others, it's adding additional locations. I would bet that out of the 249 existing Superchargers, congestion exists at less than 10% of them... 25 of the most congested Superchargers would need a doubling or more or another nearby enough and we wouldn't be talking about congestion at all for today's fleet. That's about $7 million. Of course, this is a dynamically evolving situation that also entails a huge lag time between project planning and plugs ready to charge cars.

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The cost of the Supercharger network is a rounding error on the balance sheet of companies like BMW, Volkswagen, Mercedes, etc.

You don't think that any of Tesla's potential competitors could put together a national charging network inside of a year by throwing a bunch of money at it? Of course they can, and they can do it faster than Tesla. The Supercharging network is a differentiator today, but it may not be in 1-2 years if a BMW or Mercedes wanted to accomplish the same goal. The CCS/Combo standard, which is favored by the Germans, can provide up to 100 kW of power. While not quite as high as a Supercharger, it's not off by much and could very easily form the basis of a national network by any of the big players.

The Supercharger network is not a reason for complacency. The advantage could disappear almost overnight in this business. That's probably why nobody has expressed interest in joining the network. Why bother when you can build your own?

Tesla's plans for the Supercharger network is certainly not about complacency.

As for Tesla's competitors, sure they could fund an install a national charging network similar to the Tesla Supercharger network. I think it would take 2 years, as there are many issues that takes time that just throwing money at it doesn't solve any faster.

The CCS Combo standard, as I stated before, is nominally 100 kW, but is actually only 200 amps. They need a new plug standard to have real L3 DC charging. Then they need to get EVSE equipment vendors like ABB to certify and sell a new generation of EVSE's. Then they need to get that standard deployed in vehicles. And they need to start building the stations. I think they start sometime in 2017, reaching Tesla's current footprint sometime in 2019 if they are aggressive. If they sit across from each other (figuratively) and bicker about who pays how much, then this will take a lot longer. If they wait for organic growth... ship cars with the new plug, wait for sufficient volume, invest in some stations, ship some more cars, then this will take far, far longer.

 

[ecarfan]

How will luxury brands compete with the Supercharger network over the next 3-...

The cost of the Supercharger network is a rounding error on the balance sheet of companies like BMW, Volkswagen, Mercedes, etc... You don't think that any of Tesla's potential competitors could put together a national charging network inside of a year by throwing a bunch of money at it? Of course they can, and they can do it faster than Tesla... The Supercharger network is not a reason for complacency. The advantage could disappear almost overnight in this business. That's probably why nobody has expressed interest in joining the network. Why bother when you can build your own?

While it is true that for the major car companies the cost of building a charging network is relatively small, I do not agree that they could build a network faster than Tesla has. It's a slow process no matter how much money you want to spend on it. First you have to identify potential sites (and deciding to use existing dealerships solves nothing, plus the locations are usually far from optimal). Each site involves negotiating terms and conditions, getting permits, finding and scheduling contractors, and doing the actual construction. Some site negotiations will never come to fruition. Others will be delayed at the whim of the local power utility. There are many things that can go wrong and produce delays.
There is no way that any existing car company could match Tesla's current charging network within even three years if they started right now and budgeted double what Tesla has spent. And during that time Tesla would continue expanding their existing network. It would take a decade for any other company just to catch up with Tesla.
The reason the existing auto companies aren't building their own charging networks is because they don't sell long distance EVs and they don't believe that long distance EVs are going to significantly impact their ICE profits any time soon. They don't see the urgency. This is largely because, I suspect, none of the auto company CEOs have actually lived with and used a long distance EV for a significant period of time. Fundamentally, they don't understand why a car like a Tesla is a much better car overall than the ICE vehicles they are currently selling. They are stuck in the mindset that they grew up with in the 60's and 70's and they can't break out of it.
Yes, GM is planning on selling the Bolt this year, but without an effective charging network it is still a commuter car that happens to have a 200 mile range. For some people it can serve as a primary car, but most potential buyers will not view it that way. So it's market is limited. I expect GM to sell tens of thousands of Bolts in 2017, and I genuinely hope they do. But it is not a serious Tesla competitor. As for the other auto companies, at this point they are all talk and almost no action.

 

[wdolson]

While it is true that for the major car companies the cost of building a charging network is relatively small, I do not agree that they could build a network faster than Tesla has. It's a slow process no matter how much money you want to spend on it. First you have to identify potential sites (and deciding to use existing dealerships solves nothing, plus the locations are usually far from optimal). Each site involves negotiating terms and conditions, getting permits, finding and scheduling contractors, and doing the actual construction. Some site negotiations will never come to fruition. Others will be delayed at the whim of the local power utility. There are many things that can go wrong and produce delays.
There is no way that any existing car company could match Tesla's current charging network within even three years if they started right now and budgeted double what Tesla has spent. And during that time Tesla would continue expanding their existing network. It would take a decade for any other company just to catch up with Tesla.
The reason the existing auto companies aren't building their own charging networks is because they don't sell long distance EVs and they don't believe that long distance EVs are going to significantly impact their ICE profits any time soon. They don't see the urgency. This is largely because, I suspect, none of the auto company CEOs have actually lived with and used a long distance EV for a significant period of time. Fundamentally, they don't understand why a car like a Tesla is a much better car overall than the ICE vehicles they are currently selling. They are stuck in the mindset that they grew up with in the 60's and 70's and they can't break out of it.
Yes, GM is planning on selling the Bolt this year, but without an effective charging network it is still a commuter car that happens to have a 200 mile range. For some people it can serve as a primary car, but most potential buyers will not view it that way. So it's market is limited. I expect GM to sell tens of thousands of Bolts in 2017, and I genuinely hope they do. But it is not a serious Tesla competitor. As for the other auto companies, at this point they are all talk and almost no action.

I've worked in large and small companies. In all large companies I've seen or heard about, change happens slowly. While big automakers are capable of throwing more money at a supercharger network than Tesla, they aren't capable of making all the decisions necessary anywhere close to Tesla's schedule. All this on top of what you said here. If the major car makers suddenly realize they need to build their own fast charging network, the executives at the top may be whipping the peons to try and make it go faster, but in reality it would roll out slower than Tesla's network has rolled out.

In some cases the majors would have some advantages with site location. When Tesla approaches a mall in the Midwest and says they want to build superchargers, the first reaction is probably something like "who are you?" whereas if GM approached them, they would immediately know one of the largest auto makers in the world wanted to build a facility on their property that could potentially bring many customers through their doors. But any advantage name recognition and size bring would be wiped out by the slow speed of the internal bureaucracy.

It's going to take Tesla to prove that a mass produced, low cost BEV will sell. The Bolt will beat the Model 3 to market, but GM is only planning on 30K a year. That's only 60% of current Model S production and 6% of planned Tesla production by 2020 (I'm skeptical Tesla will achieve 500,000 by 2020, but that's their plan.) If the Model 3 ramps up into the 100s of thousand cars in a couple of years and Tesla has a healthy backlog of orders, the car industry will sit up and take notice. Right now Tesla is producing cars down in the noise compared to even the smallest of mainstream ICE makers. Subaru is the smallest of them and they make 1 million cars a year. A couple of 100K a year is still small production compared to the big guys, but Tesla will show potential as a serious competitor and affordable long range BEVs will be a proven thing if the Model 3 is a hit.

The Bolt will be out there so Tesla critics can point to an affordable long range other than Tesla, but it really won't be a big player. Even if it's a hit, LG Chem doesn't have the extra capacity to make more than 50-55K of them and LG Chem definitely doesn't have the extra capacity to support a ramp up of Bolt production as well as a ramp up of another brand's long range BEV. A low production long range BEV from other makers are just going to highlight the poor charging network they have. Top executives are less likely to build more BEVs on the excuse the charging network isn't there, despite it being a chicken and egg problem.

Tesla's two keys are the superchargers and the battery production at the Gigafactory. They will remain ahead of the competition for at least a decade.

 

[Bangor Bob]

Presumably none of these companies benefit from further accelerating EV interest, so the initial rollout will be interesting.

Of course they could benefit. Updating engine plants is incredibly expensive. Producing engines is expensive - lots and lots and lots of precision machining, hand assembly, huge parts supply chain to maintain. Punching out stator plates and winding a motor is cheap, and the cost delta on winding a bigger one is way less than the delta between say, a 4-cyl and a turbo-6 or a V8. Multi-gear transmissions are likewise expensive, can have high warranty costs, etc. Their profit margins stand to improve quite a bit, at least temporarily.

 

[Bangor Bob]

Gee, wouldn't that be convenient. Every 50 miles you have to unload one car and load another. Non-starter.

50 miles would be stupid, agreed. But say, one switch halfway between LA and SF or LA and Mammoth? A quick stop in Hartford on the NYC to Boston run. You're going to need a comfort break at some point anyway. What if there's a valet to greet and direct you, and porter to take care of your "stuff" and move it over? Does it matter if you don't come back to the same car then?

This is, in my humble opinion, the drawback to driverless rentals. We have a "bus station" in a town near us. It stinks. The passengers are poorly dressed, dirty, carrying plastic bags for clothes. Sure, they need cheap transportation, but it's why you don't rent out YOUR Tesla. People, generally, just don't care. Their own homes look like a trash or garbage can, and their cars are worse. How many movies have you seen where the hero rents a car and trashes it, for fun?

Cameras are cheap, T&C's can have damage clauses, and if they're coming to a central point then a visual inspection can be done and they know who was in it when it left, and who came back in it. <shrug> You'd be going to the Tesla/Mercedes/Audi/BMW depot. That would be equivalent to the Platinum-Elite lounge at the airport. With curbside valet, no TSA and no economy class passengers between you and the lounge. Those "other" messed-up cars would be at the Chevy/Kia/Dodge terminal down in the hood, along with their "lesser-advantaged" passengers and services, or lack thereof, that the rental price can support.

Whatever - it's one possible future.

 

[supratachophobia]

I've never waited for a charging stall in the Midwest or east coast.

 

[Jopo43]

I think Tesla gets it and the other companies for example GM and the bolt don't. I want a car that I can drive everywhere not drive to a chevy dealer and hope they are open and hope they will let me charge. I have a volt at the moment and I am convinced Chevy dealers don't really want to sell them... Without a real free fast charging network the Bolt is useless give me the Model 3 and Tesla will rule the world!!!!

 

[electracity]

Of course they could benefit. Updating engine plants is incredibly expensive. Producing engines is expensive - lots and lots and lots of precision machining, hand assembly, huge parts supply chain to maintain. Punching out stator plates and winding a motor is cheap, and the cost delta on winding a bigger one is way less than the delta between say, a 4-cyl and a turbo-6 or a V8. Multi-gear transmissions are likewise expensive, can have high warranty costs, etc. Their profit margins stand to improve quite a bit, at least temporarily.

I don't think the first issue is margins. It's that there is not a large demand for EV from GM's customers. What most EV enthusiasts expect from the big automakers is for these companies to spur demand.

But I do think demand overall will follow the path of the model S: Earliest adopters get their peers interested in EV.

 

[Spidy]

The vast majority of superchargers are empty most of the time. Its only a handful that are regularly backed up. Also keep in mind that its highly unlikely that all Model 3's will come with supercharging enabled, and its probable that it won't be free for them. They've also got another year or two to get even further ahead of the curve. If they continue at their current rate that will almost double the network.

The Supercharger network is one of the main selling points of a Model 3 vs. several other competitors, so I expect a lot of buyers to get that option.

And what really matters is peek demand, mostly holidays. If Tesla can't guarantee short to no wait times then a BMW i3 with the option to get a SUV over Christmas suddenly looks a lot more attractive.

Which I think is one of the main reasons they don't want to commit to their own network. Because then it creates the pressure of availability, especially if you use it for marketing like Tesla. And it's really a commitment for 10-15 years when nobody even knows how the infrastructure and EV market will look in 5 years.

 

[calisnow]

And what really matters is peek demand, mostly holidays.

I've often thought of this problem - I was worried that the L.A. to Mammoth route would be slammed with Teslas this winter. Hasn't happened yet, and it's an interesting case because Mammoth is a huge ski resort near Los Angeles, with most of its traffic on weekends. Part of the reason I ordered a Tesla is to save fuel $ on my frequent Mammoth trips. However so far this year I have noticed only one Tesla, one time, at the Supercharger near Mammoth. Hopefully they won't get clogged.

However I wonder if Tesla's hope is that as the Model 3 ramps up production, batteries keep getting better and range longer - thus decreasing demand for frequent Supercharger stops. Eventually if range gets past the 500 mile mark then Supercharger demand may plateau or decline even as sales rise, because the cars will have more range than most people want to drive in a single day. If this range can happen before the networks get clogged then the problem will "solve" itself before it becomes a problem.

 

[gnxs]

I think the strategy to do the Supercharger network was brilliant. Worth every penny of the investment. Makes the car viable for pretty much anybody in a passenger vehicle. Not only is it convenient, it's exclusive (and more extensive every week), which goes a long way toward the luxury allure. They are only for us.

.......and they are reliable. Try taking a trip that involves having to use Chademo charging and chances are you'll experience some type of issue. Not always, but enough to make you really appreciate what Tesla has built.

 

[chriSharek]

Slightly off topic, but they definitely can't compete if their cars can't simply receive OTA updates! One of the best features of our cars Automakers still have a lot to learn from Tesla | The Verge

This might be off-topic, but it's spot on. It's one of the biggest advantages, along with the supercharger moat!

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And they are convinced of this. That's why the holy grail of plug in cars for most everybody other than Tesla, is spelled h-y-b-r-i-d. Those "short range" plug-ins are for urban use. I think Tesla will eat their lunch. Unless Tesla doesn't like Bratwurst and Beer.

GM is clearly stepping up their game with the second Gen Volt and then the Bolt right behind it. I still think the Volt is the most sophisticated solution by eliminating range anxiety with the 40 MPG gas backup. This car strongly competes against just about every hybrid out there, including the blessed Prius.

My 2011 Volt: 85,000 miles, 360 gallons of gas total used, 85% on electricity. Handing to my 16 yo so I can get my Model S in April!