Superchargers, a future profit machine?

[Haxster]

Looking at Tesla's plans for additional Superchargers, it appears that a number of them will be in metropolitan areas. Not particularly close to major highways.

It's entirely possible that these are actually intended to provide local charging. Local Supercharging should be of particular interest to M3 owners who don't have access to home, apartment or work charging.

I may be wrong, but I don't recall that the M3 will necessarily include any free juice from Superchargers. It's also possible that Tesla could decide to increase the charge cost to generate some real profits.

Think about it: What would it take for local Superchargers to be competitive with current commercial charging stations? Price, time, location, access, resources... Tesla could actually make some money on these.

 

[croman]

Did you read Tesla's blog post? No need to speculate. It is for urban Model 3 owners who don't have access to home charging. As to profitability -- you can rest assured Tesla will not lose money with its electric rates.

 

[Derek Kessler]

But a profit machine? Maybe a little bit, but not likely a huge motivator.

It's like Apple — they make some money off iTunes, the App Store, Lighting licensing, etc. but the real profit is in iPhone and Mac sales. The services are there to support and lock-in buyers of the main hardware.

 

[kort677]

exxon/tesla ?

 

[Haxster]

exxon/tesla ?

If this hasn't happened already, I wouldn't be surprised to see "hybrid" gas stations with electric charging stations on the property...maybe even a couple of Superchargers.

A joint relationship with a major oil company is not so farfetched.

And with tons of M3s on the road, Tesla might even decide to convert some well-located distressed gas stations into Supercharger stations.

Take that, Bolt and Leaf...and the others!

Time will tell.

 

[Derek Kessler]

If this hasn't happened already, I wouldn't be surprised to see "hybrid" gas stations with electric charging stations on the property...maybe even a couple of Superchargers.

A joint relationship with a major oil company is not so farfetched.

And with tons of M3s on the road, Tesla might even decide to convert some well-located distressed gas stations into Supercharger stations.

Take that, Bolt and Leaf...and the others!

Time will tell.

Sheetz in the Eastern US has been exploring that, and there's a Supercharger co-located with a Phillips 66 gas station in Illinois:

 

[Reciprocity]

Did you read Tesla's blog post? No need to speculate. It is for urban Model 3 owners who don't have access to home charging. As to profitability -- you can rest assured Tesla will not lose money with its electric rates.

I believe when Tesla started adding fees for charging, they stated that the rates would be at or near cost, which I assume also includes some or all of the cost of the supercharging station as well. Before they started charging, this was a sunk cost, so now its a net/net so it will contribute to the overall profitability of the company long term. They could also easily justify some margin to help expand the network as the costs would be similar to home charging so most people would be happy to pay the same price and help expand the network for greater long term convenience.

 

[croman]

I believe when Tesla started adding fees for charging, they stated that the rates would be at or near cost, which I assume also includes some or all of the cost of the supercharging station as well. Before they started charging, this was a sunk cost, so now its a net/net so it will contribute to the overall profitability of the company long term. They could also easily justify some margin to help expand the network as the costs would be similar to home charging so most people would be happy to pay the same price and help expand the network for greater long term convenience.

I have no problem with Tesla charging whatever they want and justifying it however. I'm just saying Tesla maybe won't book profits but they also aren't losing money either. Also parity with fossil fuel prices leaves room for spikes in price.

 

[Haxster]

Sheetz in the Eastern US has been exploring that, and there's a Supercharger co-located with a Phillips 66 gas station in Illinois:

Cool. However...
Tesla should have set these up so that you don't back in. It must be depressing to sit in your car and see the ICE cars come and go and come and go while you're still waiting to juice-up.

 

[jbcarioca]

I believe when Tesla started adding fees for charging, they stated that the rates would be at or near cost, which I assume also includes some or all of the cost of the supercharging station as well. Before they started charging, this was a sunk cost, so now its a net/net so it will contribute to the overall profitability of the company long term. They could also easily justify some margin to help expand the network as the costs would be similar to home charging so most people would be happy to pay the same price and help expand the network for greater long term convenience.

Yes. From what I see of current pricing it is mostly at or near typical residential rates everywhere. Nowhere are the SC rates out of line with typical residential rates that I can see, although off-peak rates, where applicable, are probably much cheaper. That is fair since we mostly use Supercharging during the day while traveling. Nowhere that I can see is Supercharging cost anywhere much above 15% of typical equivalent ICE fueling cost. Reasonable people will not complain about that, at least I will not. In the meantime I like the free charging I now have...until my next Tesla arrives.

 

[Reciprocity]

I have no problem with Tesla charging whatever they want and justifying it however. I'm just saying Tesla maybe won't book profits but they also aren't losing money either. Also parity with fossil fuel prices leaves room for spikes in price.

We are saying the same thing. If they wanted to charge on par with fossil fuels they would make an enormous amount of money with 500,000 S/X fueling at superchargers. I dont think they will do that and I dont see supercharges as a profit center.

I also think that free supercharging will make a comeback in some form. I was thinking they would add it to FSD to encourage more people to buy it. Or they could add it back to S/X as a differentiation and a way to offset the lost of tax credits going forward. Tesla has been very creative with pricing and bundles that leads me to believe that free supercharging will make a comeback in some form in the future, probably not until after demand is not nearly as high as it is today and probably after tax incentives run out.

 

[croman]

We are saying the same thing. If they wanted to charge on par with fossil fuels they would make an enormous amount of money with 500,000 S/X fueling at superchargers. I dont think they will do that and I dont see supercharges as a profit center.

I also think that free supercharging will make a comeback in some form. I was thinking they would add it to FSD to encourage more people to buy it. Or they could add it back to S/X as a differentiation and a way to offset the lost of tax credits going forward. Tesla has been very creative with pricing and bundles that leads me to believe that free supercharging will make a comeback in some form in the future, probably not until after demand is not nearly as high as it is today and probably after tax incentives run out.

I'm wondering about the effect of the loss of the credit will mean. Other manufacturers that are late to the EV game benefit while the credit exists. Trump and Ryan penciled in its sunset early for all manufacturers (which would benefit Tesla financially but frustrate their actual mission statement as it would stymie not advance sustainable transportation adoption). Its all very much in the air and even if the credit remains, I think Tesla's offerings are usually more compelling but that could change and FUSC might be the thing that no other manufacturer can offer (if the buyer truly appreciates what the Supercharger network enables in terms of fast, convenient long term travel).

 

[Sonny Daze]

Cool. However...
Tesla should have set these up so that you don't back in. It must be depressing to sit in your car and see the ICE cars come and go and come and go while you're still waiting to juice-up.

Hopefully they are facing north so they don't have to look into the sun.

 

[Derek Kessler]

Hopefully they are facing north so they don't have to look into the sun.

Indeed they are.

 

[Reciprocity]

Its all very much in the air and even if the credit remains, I think Tesla's offerings are usually more compelling but that could change and FUSC might be the thing that no other manufacturer can offer (if the buyer truly appreciates what the Supercharger network enables in terms of fast, convenient long term travel).

I know, I have been pondering the effects and I think there is a good chance that the credits go away, but having stated that, I feel like the EV and Solar credits might survive as they do not negatively impact jobs and in theory could be changed to for american made cars and solar only. I however am not worried at all about how Tesla compensates for credits as it relates to its competitors. With the transition from 18650 to 2170 alone is going to save them $5,000ish per car in costs, which could be passed along to consumers if they even need to as they continue to improve the cars. The other $2,500 in savings could come from building their own processor instead of the very expensive HW2 processors and savings from economies of scale going from 120k cars per year run rate to 500,000 by the time the EV credits run out. Savings form everything from seats to mirrors to aluminium.

As far as the 3 goes, they are already competitive without the full credits when you factor TCO.

 

[cpa]

I think it would be a colossal marketing and public relations mistake if Tesla were to bring back free, unlimited Supercharging now that all buyers have an annual limit of 400kWh for free.

I could see Tesla's referral program generating SC credits to the referring owner. (Perhaps 1,000KwH that never expire.)
I could see Tesla using SC credits to induce buyers to upgrade their purchase to the P100D, or to purchase a more optioned car. (Perhaps an annual allotment of 1000KwH.)
I could see Tesla using SC credits to induce existing owners like me who have the unlimited, lifetime option to buy a new S or X. (Perhaps 1,000KwH annual allotment.)

I am not convinced that Tesla will continue to be in the Supercharging business 10-15 years from now. They are creating a business model with their charging schemes across the globe. It would not surprise me that by 2025 or so, that Tesla turns over its Supercharging business to ChargePoint or a company like that. There might be a road-tax equivalent by then baked into a KwH fee too. This arrangement might be an outright asset sale or a joint venture with the third party handling the paperwork and Tesla handling the service and maintenance.

 

[Saghost]

It's entirely possible that these are actually intended to provide local charging. Local Supercharging should be of particular interest to M3 owners who don't have access to home, apartment or work charging.

I may be wrong, but I don't recall that the M3 will necessarily include any free juice from Superchargers. It's also possible that Tesla could decide to increase the charge cost to generate some real profits.

It's not just possible - that is quite explicitly the purpose of the city Superchargers. Tesla hasn't promised anything specific for the 3 except that it will be capable. My guess is they'll do the same 400 kWh per year, but it's just a guess. It doesn't cost them much, it does get folks to try it (the first hit is free...) and it makes a great marketing edge.

I think it would be a colossal marketing and public relations mistake if Tesla were to bring back free, unlimited Supercharging now that all buyers have an annual limit of 400kWh for free.

I could see Tesla's referral program generating SC credits to the referring owner. (Perhaps 1,000KwH that never expire.)
I could see Tesla using SC credits to induce buyers to upgrade their purchase to the P100D, or to purchase a more optioned car. (Perhaps an annual allotment of 1000KwH.)
I could see Tesla using SC credits to induce existing owners like me who have the unlimited, lifetime option to buy a new S or X. (Perhaps 1,000KwH annual allotment.)

Unlimited supercharging is dead. It has been ever since companies started using Tesla funded electricity to drive hundreds of thousands of miles per year as a business model. I don't think there's any possibility that will ever come back.

In addition to the versions you mentioned here, I could also see Tesla offering a one time fee for a bigger annual allotment, or a "road trip" package - larger battery pack, more annual SpC credits, and maybe eAP or FSDC in the bundle - which I guess is kinda similar to your second version.

 

[brkaus]

Unlimited supercharging is dead. It has been ever since companies started using Tesla funded electricity to drive hundreds of thousands of miles per year as a business model. I don't think there's any possibility that will ever come back.

This. Exactly. Look at the lines at Costco gas stations to save $.10 per gallon to see why. It's just not sustainable. People are irrational and they just couldn't build enough superchargers.

It had its purpose, now it's done.

Yes to possible credits, specials, etc.

 

[BBryson]

For those of us with cars that have free supecharging for life, Tesla is under no obligation to extend this to every future supercharger built. It's feasible the new urban chargers will have fees for all.

 

[X Fan]

If this hasn't happened already, I wouldn't be surprised to see "hybrid" gas stations with electric charging stations on the property...maybe even a couple of Superchargers.

A joint relationship with a major oil company is not so farfetched.

And with tons of M3s on the road, Tesla might even decide to convert some well-located distressed gas stations into Supercharger stations.

Take that, Bolt and Leaf...and the others!

Time will tell.

+1....ie....Sheetz makes more money on food sales vs. gas.....