What Are The Benefits Of Increased Tesla Supercharger Rates?
TO FUEL GROWTH, TESLA SUPERCHARGER RATES ARE GOING UP
For years, charging at a Supercharger was free for Tesla owners. However, the company eventually decided to implement Supercharger fees and recently increased its rates. Although Tesla owners might not love this decision, shareholders should be pleased. Why? According to Seeking Alpha’s ValueAnalyst, upon careful analysis — this could actually be considered a brilliant move for the company.
More Info: TESLA RAISES SUPERCHARGER RATES IN U.S.
*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Matt Pressman. The opinions expressed in these articles are not necessarily our own at InsideEVs.
Above: Model X at Tesla Supercharger (Instagram: modelxpdx)
It’s reported that “Tesla just raised the price per kilowatt-hour (“kWh”) that it charges customers at its Supercharger locations. According to Electrek, some states saw increases of as much as 100%, but rates in most regions increased by 20% to 40%. Rates in Oregon, for instance, doubled from $0.12 to $0.24 per kWh, while rates in California, the company’s biggest market, increased from $0.20 to $0.26 kWh.”
That said, Tesla reaffirmed its Superchargers will never be a “profit center” and continue to remain (significantly) less than the cost of gas. Yet, “higher rates will allow the company to fund the expansion of the Supercharger network through internal funds in addition to external, which may accelerate the expansion.” For some context, in the next five years or so, “with a fleet of size of two million units… $25 extra per year per vehicle would amount to $50 million in annualized positive bottom line impact.”
Above: A line of Tesla Superchargers (Instagram: bsprankles)
There’s another distinct advantage to this strategy. With the company’s growth, “congestion at Supercharger locations had sometimes been an issue for Tesla owners, and… the coming wave of Model 3s had some owners worried. Even though Tesla had already taken several steps, including an idle fee and letters to heavy users, higher rates at Supercharger locations will encourage more owners to instead charge their vehicles at home, freeing up Superchargers for their intended use: enhancing long-distance travel.”
And there’s another bonus to Tesla’s strategy, “higher rates increase the value of the company’s Free Unlimited Supercharging referral program, which allows Model S and Model X owners give five friends free, unlimited Supercharging with the purchase of a new Model S or Model X. By adjusting the dial on relative value propositions, some demand will shift from the Model 3… which has a long waiting list, to the Model S, which already is in volume production.”
Above: Tesla Model S charging (Instagram: myofficeswedan)
From a shareholder perspective, Tesla’s decision to increase Supercharger pricing could (ultimately) prove highly beneficial. ValueAnalyst concludes, “Tesla’s recent move is brilliant… [and] when analyzing the steps Tesla takes, investors should always consider the company’s mission statement, which is a long-term commitment, instead of getting lost in quarterly numbers.”
Source: Seeking Alpha
*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers. Our thanks go out to EVANNEX, Check out the site here.