Tesla’s +$255Bn Home Charger “CarBnB” Opportunity

[MarcFolch]

You're missing a few other tangential benefits:

1. Helps to take the belly out if the duck curve in high solar penetration markets if people are L2 charging during the day.

2. Reduces the need to install a large fixed battery under California's NEM3, if a solar household can sell that electricity directly to a CarBnB patron for more $/kWh than they could sell solar to the grid

Honestly this doesn't need to be a Tesla thing, could just as easily be a feature of the PlugShare app instead. Automating the billing would be the major technical hurdle.

I see this working best if it's a long term standing arrangement. I.e., if person A could park in person B's spot close to where person A works during business hours, person B parks at person C's place, etc, this could be incredibly win win win...

Not saying it couldn't accommodate itinerant patrons and commercial spaces too, but the standing reservation situation is far easier to deal with, people get more comfy renting to those they know, etc.

Love it!

Totally agreed it doesn't need to be a Tesla thing. They just have 80% of the pieces in place right now to do this fast and cheaply:
- Millions of installed L2 chargers that can be controlled by software and set to only allow charging for specific teslas
- A vertically integrated software stack with app, in-car navigation, billing, and push notifications
- In-car cameras that can automatically validate that a spot is safe, available, and working to ensure quality of experience
- A willingness to try and quickly scale this kind of thing

Basically it's just an app update for them to launch.

 

[MarcFolch]

Maybe I am in the minority here, but I am not interested in the slightest at pulling up in some random homeowners driveway and parking my car, nor would I be interested in the slightest at offering it to someone else.

For full disclosure, I dont do AirBNB (I think its a plague, actually, since I would not want to live next to an AirBNB and most people if asked wouldnt want to live next to a short term rental either), I avoid uber, turo, etc.

That "person to person" stuff isnt for me, since my experience is that there is always someone looking to "get over" on people, and I can avoid a lot of that by doing business with actual businesses vs random people.

That's totally fair, it's not for everyone, not should it be (just like AirBnb).

AirBnB has still built an $86 Billion business out of the segment that does like what they do. So if this is similarly viable, why would Tesla turn down that kind of in-house opportunity? Easy money to further fuel the transition to sustainable...

 

[MarcFolch]

that's pretty cool to see

Thanks Gndy, really appreciate the positive words!

 

[MarcFolch]

Agreed. That's all this is. Plugshare with payments.

+ Parking, and that's where a lot of the revenue comes from (check out the model in the link).

In places where this would work, people are paying for parking anyway. Why not pay for it from a fellow EV owner who's not using their spot when you need one? If it's priced a bit below what the local average parking rate is, everyone wins.
- The renter gets a better parking fee + a topped up battery while they do whatever they are doing downtown
- The spot owner gets free money for doing basically nothing
- Tesla gets billions more to plow back into accelerating growth towards global sustainability

 

[MarcFolch]

Mine is in my garage so I'd be out, but I can definitely see some people would be open to it depending on where their charges are. I could never tell on plugshare if an actual charge point was usable or not; never really trusted that their data was updated.

I don't want to use the plugshare app but at the same time I am not sure tesla wants to have their charge search filled with people's homes, apartments, etc.

Fair point about it potentially cluttering up the search, but I'd propose that could be solved with some filters and user experience design:

1- They normally only show up when the driver routes to a destination and then the app would ask if they want to book destination parking + charge. At this point, only the closest 5-10 options to their destination address would show up.

2- The user would have to manually tell the (current) search for chargers to include rentable level 2 chargers. Level2 is too slow for mid-trip charging, so this is really only for destinations where drivers will stop for at least 1-2 hours for other reasons than charging.

 

[rzn89]

Not saying it's an issue, I agree with you supercharging's great!

But wouldn't it be better if you're driving downtown and paying for parking anyway to be able to have your charge topped up while you're at work + knowing ahead of time exactly where you'll find a spot? It's just a better user experience. With dynamic pricing, this could even be set to slightly undercut the average parking price locally to make sure it's used most of the time.

Free money to the spot owner, better convenience and possibly cheaper price for the renter.

I would rather charge at home personally because i have solar and it would be cheaper even w/o solar. I get your idea, Montreal has L2 chargers all over the city and in parking lots. I took the kids to a museum and we were there for close to 3 hours and I added 21 kWh it’s only $1hr plus the $3hr parking cost that you have to pay anyways. Was only 74c for me due to the exchange rate.

 

[HankLloydRight]

+ Parking, and that's where a lot of the revenue comes from (check out the model in the link).

In places where this would work, people are paying for parking anyway. Why not pay for it from a fellow EV owner who's not using their spot when you need one? If it's priced a bit below what the local average parking rate is, everyone wins.
- The renter gets a better parking fee + a topped up battery while they do whatever they are doing downtown
- The spot owner gets free money for doing basically nothing
- Tesla gets billions more to plow back into accelerating growth towards global sustainability

This still makes zero sense to me. First of all, how does Tesla make over $3b on third-party chargers and parking? Wouldn't you need to compensate the spot owner most of the revenue for the parking and the energy costs?

Second, you're assuming 3 MILLION such charging spots. Where are all these millions of privately owned L2 chargers, but ALSO in high-demand parking areas?

L2 charging locations are, by far, either in someone's home garage (not applicable) or at a public location like Whole Foods, corporate buildings, or hotels subsidized by the commercial entities (also not applicable). Please provide some examples of privately owned charging locations, and not subsidized by a commercial entity, and ALSO where people would otherwise pay for parking. I think that's a tiny subset of the available L2 charging locations. And an even smaller subset is how many of those owners would even sign up for this in the first place?

Sorry, but the entire premise is bonkers.

 

[MarcFolch]

This still makes zero sense to me. First of all, how does Tesla make over $3b on third-party chargers and parking? Wouldn't you need to compensate the spot owner most of the revenue for the parking and the energy costs?

Second, you're assuming 3 MILLION such charging spots. Where are all these millions of privately owned L2 chargers, but ALSO in high-demand parking areas?

L2 charging locations are, by far, either in someone's home garage (not applicable) or at a public location like Whole Foods, corporate buildings, or hotels subsidized by the commercial entities (also not applicable). Please provide some examples of privately owned charging locations, and not subsidized by a commercial entity, and ALSO where people would otherwise pay for parking. I think that's a tiny subset of the available L2 charging locations. And an even smaller subset is how many of those owners would even sign up for this in the first place?

Sorry, but the entire premise is bonkers.

It makes more sense when you look at the model and the assumptions in it (owner keeps 60%). You can save a copy and modify the blue assumption cells to whatever you think makes sense and see what you get. Tesla Home Charger CarBnB Model - PublicRevenue Model Tesla Home Charger CarBnB Revenue Model Model assumes owners are making their spot available when unused…docs.google.com

The 3 mil locations isn't today, I agree that would be completely unreasonable. It's to gauge the opportunity size when it gets to scale in 6+ years. Tesla shipped 1.8 Million cars in 2023 and is growing 30-50%/yr with a target of 10 Mil/yr. If you're shipping 5-10Mil cars/yr and most of those owners install a home charger, 3Mil is not really a big % of the fleet. Less than 10% after a few years at those volumes.

The model actually has a section at the bottom where it shows you the revenue impact based on different scaling sizes. Even at 250k chargers it's ~200 Million in profit per year, which would add $15Bn to Tesla's valuation at current P/E rates. Most businesses would be pretty happy if they could add a $15Bn side-gig with nearly no CAPEX.

 

[HankLloydRight]

If you're shipping 5-10Mil cars/yr and most of those owners install a home charger, 3Mil is not really a big % of the fleet. Less than 10% after a few years at those volumes.

But you didn't answer my question. How many of those home chargers are going to be in high-traffic/high-commercial areas with paid parking and very close proximity to those public/commercial businesses and services? Your entire model relies on people with L2 residential chargers very very close to paid parking commercial areas (i.e. walking distance).

That seems like a very very small number of available chargers. And again, how many of those qualifying charger owners would sign up for strangers parking in their home driveway for hours on end?

You also don't factor in liability or insurance. If a person is renting out their home parking space and charger, and something happens to the renting vehicle (say a tree falls on it), who's liable? You can bet for sure that the homeowners policy isn't going to cover that since it's a parking space+charging rental business. What if there's a charger malfunction? What if someone parks in your home driveway parking spot connected to your charger and disappears for two days. Or as mentioned above, what if someone is assulted or robbed while parked at your home charging on your charger.

As I said, bonkers.

 

[MarcFolch]

But you didn't answer my question. How many of those home chargers are going to be in high-traffic/high-commercial areas with paid parking and very close proximity to those public/commercial businesses and services? Your entire model relies on people with L2 residential chargers very very close to paid parking commercial areas (i.e. walking distance).

That seems like a very very small number of available chargers. And again, how many of those qualifying charger owners would sign up for strangers parking in their home driveway for hours on end?

You also don't factor in liability or insurance. If a person is renting out their home parking space and charger, and something happens to the renting vehicle (say a tree falls on it), who's liable? You can bet for sure that the homeowners policy isn't going to cover that since it's a parking space+charging rental business. What if there's a charger malfunction? What if someone parks in your home driveway parking spot connected to your charger and disappears for two days. Or as mentioned above, what if someone is assulted or robbed while parked at your home charging on your charger.

As I said, bonkers.

Love that we're getting into the details, this is exactly how ideas get tested and improved!

To address your question about the number of home chargers downtown, I'll break it down to two factors:

1- Do these privately owned spots exist near high demand locations where parking fees are high?

- Around Toronto they definitely do. Except right at the core where it's all condo towers, there are houses all over the city within a couple blocks of paid parking zones and many have driveways, laneway garages, etc...​

- Condo towers also have tons of underground parking. Most places here allow renting long term and in the later part of the business plan I write about how the access management (Clickers, fobs, etc...) could be resolved.​

​

2- Would homeowners be willing to rent these out?

- That's a matter of cost-benefit. If the user experience is easy, owners have to do nearly nothing, and they make thousands a year from their spot when unused, that's a good amount of nearly free money, especially with people feeling cash squeezed today.​

- Renting out a parking spot is far less intrusive than renting out a spare room or your whole house and AirBnB has already proven that millions of people are happy to do that. Not everyone, but more than enough to make a great business. The economics of AirBnB have also caused a lot of people to buy and put units on market specifically to make money from it.​

- With revenues being attractive enough (say $4-5K/yr) downtown, it becomes viable for a lot more condo owners to invest in adding a charger ( more expensive in condos because of added wiring and metering). Today's high cost discourages EV ownership downtown... but wouldn't if chargers pay for themselves in 2 years from rental revenue.​

​

Now for the liability and quality of service (eg. broken charger) questions:

1- Tesla already has a pooled car insurance business in several states and AirBnB has demonstrated a successful insurance model for rentals with AirCover. It's also common practice for terms and conditions to limit edge case liability (Eg. If a tornado wrecks your car while parked). Just gets rolled into Tesla's CarBnB operating costs.

2- However Tesla has a major advantage with 24/7 360 degree cameras on every car. These can be remotely instructed to back up arrival/departure videos and any sentry mode events during the parking session to prove who is at fault. That's way better than AirBnB could ever do and would discourage bad behaviour. Plus Tesla's vision AI can automatically assess whether a spot is safe, well lit, and accessible to instantly disqualify spots that aren't.

3- Tesla home chargers are already built today for online management and can easily signal Tesla and their owner if there is a malfunction. Allowing renters to be re-routed to another spot.

As for someone staying beyond the time slot the owner has made available, I talk about that in the business plan. Painful per-minute penalty fees (like at superchargers) that go to the owner to compensate them for the inconvenience.

Keep up the questions and challenges, this is great!

 

[HankLloydRight]

- Around Toronto they definitely do.

- Condo towers also have tons of underground parking.

I've never seen a condo building in any central city not be gated and secured. I don't see how juggling fobs or key codes would solve that. And even if that problem is solved, each owner would need to get permission from the condo/coop to allow third party cars into the facility. That's a huge non-starter right there. As a condo/coop owner, NFW would I want some other owner renting out their spot in our shared garage to transient drivers.

. Just gets rolled into Tesla's CarBnB operating costs.

Hand waving. Doesn't make the problem just go away. I just don't see Tesla EVER getting into the charging/parking spot short-term rental business. And if they did, I'm sure it would fail after a year.

Plus Tesla's vision AI can automatically assess whether a spot is safe, well lit, and accessible to instantly disqualify spots that aren't.

LOL. Tesla's AI. So I'm a driver, and I'm pulling up to a parking location and the car is going to tell me "I'm sorry, Dave, I'm afraid I can't do that". That would be the last time I try using the service.

 

[MarcFolch]

I've never seen a condo building in any central city not be gated and secured. I don't see how juggling fobs or key codes would solve that. And even if that problem is solved, each owner would need to get permission from the condo/coop to allow third party cars into the facility. That's a huge non-starter right there. As a condo/coop owner, NFW would I want some other owner renting out their spot in our shared garage to transient drivers.



Hand waving. Doesn't make the problem just go away. I just don't see Tesla EVER getting into the charging/parking spot short-term rental business. And if they did, I'm sure it would fail after a year.



LOL. Tesla's AI. So I'm a driver, and I'm pulling up to a parking location and the car is going to tell me "I'm sorry, Dave, I'm afraid I can't do that". That would be the last time I try using the service.

Ok, thanks for the input. After 4 rounds, you keep brining up stuff that's addressed in the plan, which you don't seem to have read but instead just call B.S. because of wrong assumptions about what's being proposed.

I'm all for having a legitimate discussion about key assumptions being wrong but if you're not going to actually read and understand what you're arguing against, there isn't a lot of value in this.

Really do appreciate the engagement, happy to continue if you read it and want to debate the actual proposal instead of a straw man.

 

[mgazzolo]

Hey Marc, after reading through your Medium post, I believe some of your assumptions are overly ambitious and the amount of effort required by Tesla likely larger than outlined*. Even so, I LOVE the idea! Tesla is a company that took the business of selling home battery packs meant to serve as a a backup for a power outage and turned these into virtual power plants. So, why not turn level 2 chargers meant for home charging into a revenue generating resource for owners (and, Tesla)?

*Apologies if I missed this, but I didn’t see any estimates for what type of development costs this would entail for Tesla. Also, presumably their programmers, project managers, etc. are already involved in ongoing work. So, there’s some sort of opportunity cost to be considered. Also, home chargers become competitors with Superchargers, which will change their ROI calcs on expanding that network. But, this was a fun holiday project and not a complete business proposal.

With that nitpicking out of the way, I wanted to mention another use case: apartment dwellers who own an EV, but lack dedicated charging in their complex. There are plenty of suburban areas with single family homes near apartments. Hopefully this issue will become less pronounced over time, but for now, it’s an impediment to EV ownership. I would gladly help by selling kWh to these folks at a competitive rate if Tesla served as an intermediary.

 

[MarcFolch]

Hey Marc, after reading through your Medium post, I believe some of your assumptions are overly ambitious and the amount of effort required by Tesla likely larger than outlined*. Even so, I LOVE the idea! Tesla is a company that took the business of selling home battery packs meant to serve as a a backup for a power outage and turned these into virtual power plants. So, why not turn level 2 chargers meant for home charging into a revenue generating resource for owners (and, Tesla)?

*Apologies if I missed this, but I didn’t see any estimates for what type of development costs this would entail for Tesla. Also, presumably their programmers, project managers, etc. are already involved in ongoing work. So, there’s some sort of opportunity cost to be considered. Also, home chargers become competitors with Superchargers, which will change their ROI calcs on expanding that network. But, this was a fun holiday project and not a complete business proposal.

With that nitpicking out of the way, I wanted to mention another use case: apartment dwellers who own an EV, but lack dedicated charging in their complex. There are plenty of suburban areas with single family homes near apartments. Hopefully this issue will become less pronounced over time, but for now, it’s an impediment to EV ownership. I would gladly help by selling kWh to these folks at a competitive rate if Tesla served as an intermediary.

Great points and thank you for taking the time to read it!

I completely agree with you that some of the assumptions may need to be dialled back based on deeper investigation and refinement. If you have any suggestions, I'd be happy to re-run the model to see what it spits out. This can be a lot less profitable than the initial estimate and still remain a significant, attractive side business for Tesla.

Regarding the effort required by Tesla, you're 100% right that it's not in there yet. As you also rightly pointed out, it's been a holiday project over a few evenings and a weekend so it's not fully fleshed out. I'd bet that a prototype could be thrown together in rapid Tesla style without spending crazy money, tested with employees, then incrementally rolled out without excessive CAPEX. At most a few tens of millions, and perhaps not even 10.

One of the reasons this is such a great fit for Tesla is that pretty much all the hardware pieces, distribution chain, and a good chunk of the software requirements (like an app to put it in) are already built. Which drastically reduces standup costs compared to other players.

That's actually a great point about the apartment dwellers without charging in their complex, hadn't thought about that use case. Thanks for coming up with it! With Tesla having access to all the geolocation and charging stats on all their cars and wall chargers, I'd love to get a chance to run some queries to quantify these. A little well scripted SQL+Python, and they could be spitting out some solid predictive heat maps of exactly which locations and owners fit the various demand and supply profiles.

 

[ItsNotAboutTheMoney]

The craziest ones were a bowling alley in Georgia.

Coincidentally, that's Brunswick, GA.

 

[rzn89]

Coincidentally, that's Brunswick, GA.

Hahahhahahaha didn't put 2 and 2 together until I saw the words! I did win my kid a stuffed animal for $3 in a claw machine at the arcade there.

 

[HankLloydRight]

Ok, thanks for the input. After 4 rounds, you keep brining up stuff that's addressed in the plan, which you don't seem to have read but instead just call B.S. because of wrong assumptions about what's being proposed.

I read the plan here: Tesla’s +$255Bn Home Charger “CarBnB” Opportunity and none of the things I brought up are addressed.

I'm also not opening a google sheets to sift through assumptions to answer the simple questions/issues I brought up.

And I'm certainly not releasing any credentials to gain access to the plan. If you want people to read it, make it public somwhere.

 

[PowerSource]

A distinction without a difference, in this case.

an EVSE puts out AC a charger rectifies AC to DC.

 

[mikez10288]

an EVSE puts out AC a charger rectifies AC to DC.

Yes, I know what the difference is. Everyone in this thread knew what the poster meant. Do we really need to get that pedantic?

 

[heymull]

Maybe I am in the minority here, but I am not interested in the slightest at pulling up in some random homeowners driveway and parking my car, nor would I be interested in the slightest at offering it to someone else.

For full disclosure, I dont do AirBNB (I think its a plague, actually, since I would not want to live next to an AirBNB and most people if asked wouldnt want to live next to a short term rental either), I avoid uber, turo, etc.

That "person to person" stuff isnt for me, since my experience is that there is always someone looking to "get over" on people, and I can avoid a lot of that by doing business with actual businesses vs random people.

I don't know if you are in the minority, but even random people, if they are filtered by an app that rates trust/creates trust ratings, can become trustworthy. Companies can be good or bad: they are created, maintained and warranted by people.

The decision to participate in this might have more do with where your home is located and the demographics, and how close the L2 charger is to a stable, trustworthy customer base. Is the home and L2 charger located near a college campus, a medium sized business park; is it well-lighted at night, are there wired-cameras trained on the charger?

Great ideas can sound crazy at first.