Motley Fool Investigates Financials Of Tesla’s Supercharger Network

SEP 17 2015 BY MARK KANE 48

Supercharger Network

Supercharger Network

Tesla Delivered ~17,400 Model S Sedans In North America In 2014

Supercharging

The Motley Fool is wondering how much does Supercharging cost Tesla?

Costs splits between installation, maintenance and electricity costs (because Tesla Model S drivers are not directly paying for electricity). Some revenues were generated by including supercharging access into the Model S price (in some versions its an optional feature).

Tesla already has over 500 Supercharging stations.

10-Q SEC reports Tesla intends to increase the number of stations by 50% (during 2015) and spend 5% of total capital spending over the next 12 months (from mid-2015).

Goal for 2015 has already been achieved (from some 330 to over 500 stations).

“Our capital expenditures and operating expenses have significantly increased in the past year. As we continue to invest in the long term growth of Tesla, capital spending and operating expenses will continue to increase, but at a more moderate pace than in 2014. During 2015, capital expenditures are expected to be about $1.5 billion as we expand production capacity, complete Model X development, and continue to build the Gigafactory; expand our stores and service centers, expand our Supercharger network, and continue other product development programs, including Model 3.”

“As of June 30, 2015 and December 31, 2014, the net book value of our Supercharger network was $139.8 million and $107.8 million and currently includes 480 locations globally. We plan to continue investing in our Supercharger network for the foreseeable future, including in North America, Europe and Asia and expect such spending to be approximately 5% of total capital spending over the next 12 months. During 2015, this investment will grow our Supercharger network by about 50%. We allocate Supercharger related expenses to cost of automotive revenues and selling, general, and administrative expenses. These costs were immaterial for all periods presented.

Assuming 150-250 new stations for 5% out of $1.5 billion ($75 million) we see just $300,000-$500,000 per station, but this is just a guess, as the above sentence isn’t clear about investment and increase of the stations over the same period.

Costs related to Superchargers are immaterial, according to Tesla.

Source: The Motley Fool

Categories: Charging, Tesla

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48 Comments on "Motley Fool Investigates Financials Of Tesla’s Supercharger Network"

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I think I would prefer a number of how much it costs them rather than saying sc related costs are immaterial. Clearly that answer is
insufficient and suspect. I could just as well say such costs are not immaterial.

I think I’ve read that each Supercharger unit (which supplies two charging stalls) costs Tesla about $50,000, or at least it did initially; costs may have come down somewhat. I presume that cost is part of the estimated $300,000-500,000 per station; stations average five stalls*, and presumably the cost also includes buying/leasing the land and construction.

*Sometimes there is room for only one stall for a Supercharger unit, rather than the normal two.

Thanks for the info.

A SC shouldn’t cost Tesla over $4k each in parts, labor so station costs is about that x’s number of them, normally 8? plus install and land cost/rent.
An 8-16 unit station shouldn’t cost over $120k-200k.

A supercharger charging bay is usually composed of either 12 10kw or 11 kw chargers, of which it is interesting to note that Nissan charges $1,680 for their 6.6kw over 3.6kw enhanced charging option on the Leaf S.

It seems to me that 12 – 10 kw chargers could easily cost $24,000. And that’s just having them loose in a box, and does not include the box, fans, controls, wiring, switchboards, stalls, or anything else.

The “immaterial” is a legal term that allows Tesla to not have to disclose the amount in their public corporate documents.

GO TESLA GO

GO MISTER G GO! 🙂

Tesla should just charge for the SC use. 5 dollars or euros flat fee, there would be nothing wrong wih that…

It would be a mistake to try and monetize the network so early in its development and deployment. It will be much easier to do once all of a region is truly covered and they are having to expand the chargers due to over crowding.

Five dollars a charge is not nearly enough to make them profitable, and it adds a significant nuisance factor. I do expect some changes in how the Model 3 pays for a charge.

Let’s not forget Tesla solar can make power at $.04/kwhr, $2-3/charge, so not so big a cost as many think.
And owners pay up $2k for it, say $1k to capitalize the SC’s and $1k for power.
And Tesla likely gets paid serious interest on it paying for most Tesla owners SC use without even touching the capital.
Sweet deal really.

The problem with charging for access is that they then have to navigate all the complex paperwork and regulations for being an electric utility in a zillion different districts. I think they just made the determination that it was better (at least for now) to work the cost into the up-front price of a Model S instead of getting buried in that paperwork paperwork and regulations.

They do charge for it. It’s a $2000 charge to install supercharger-capable hardware in the car and install and maintain superchargers for the life of the car.

Tesla has sold 70,000 cars so far, so $2000 * 70,000 is $140 million. It’s odd that Motley Fool never mentions this at all, because it happens to be right about in line with the build-out cost of the network so far. Maintenance of said network is probably a bit more of a problem, but if Tesla doesn’t make it to their 10 year anniversary, what difference does it make? They haven’t been around long enough to even say they have a long-term network maintenance problem. Their worry today is that they need to meet their customers’ expectations, or they’re not going to make that 10 year anniversary. And meeting those needs and desires means building out the supercharger network today.

Tesla motors is 12 years old, but the debut of Model S may be considered the real starting point.

Of course the Supercharger network has a value that cannot be stated. It is the missing line. Say Audi or some other auto maker comes out with a 300 mile range EV. What go will it be if there is no place to quickly recharge it? Tesla was smart to set up the Supercharger network. Others will have to pay Tesla to use or build their own which will take time and money.

Yep. The Supercharger network is what makes me FAR more interested in a Model 3 than a Chevy Bolt. If the cars were completely equal in every other metric, I’d spend a few thousand more for the Tesla just to have access to Superchargers.

electric-car-insider.com

Most astute comment I have read this month. Bravo!

you can probably get a guess about SC costs from the reported book value of the SC network, which suggests a capital cost/station of just under $300,000.

“Costs related to Superchargers are immaterial, according to Tesla.”

Then why do they tell custoners to refrain from local/regular SC in stern e-mails?

If costs were immaterial they could simply add more stalls per station.

This “free, all you can eat” model won’t work in the future, especially with more cheap-skate mass-market Model3 customers (don’t value their time as much as S/X customers on average).

There are plenty of cheap-skates that own a Model S and rely on superchargers as the sole source of charging. There is even an LA to Vegas Tesla limo service that operates between superchargers. They really do need to charge something for using them or impose monthly limits. I doubt the letters they sent out to abusers are going to do anything since these people probably don’t have home chargers.

“There are plenty of cheap-skates that own a Model S”

I would bet there will be more once the Model3 ships, this model is not sustainable.

I was just getting ready to post this.

If SC costs were truly “immaterial” then Tesla would have no reason to invite complaints by telling Model S owners who paid for “free charging as much as you want, for life” that they are charging too much.

congestion is the primary motivation behind the email, not energy cost.

But if SC costs are “immaterial,” then why not just increase the number of stalls at congested stations?

>Daniel Sparks owns shares of Tesla Motors. The Motley Fool owns and recommends Tesla Motors.

http://www.fool.com/investing/general/2015/08/26/what-does-providing-free-charging-cost-tesla-motor.aspx

Stock pusher propaganda.

You completely underestimate the impact local charging has. Currently supercharger usage hovers at 5-10% of overall travel. Local users however will approach 100% of overall travel.

That means one local user puts as much demand as 10-20 average users. Even if currently the costs are immaterial, multiplying that by 10-20x will change the equation completely.

It sounds like you’re saying that since the costs for local SC use are not “immaterial,” and local charging is apparently a large enough problem that Tesla needed to send out a warning letter to Model S owners asking them not to charge for local travel, that SC costs are not “immaterial” now.

You are stretching a lot just to try to say something negative about Tesla. The costs are immaterial right now at the demand level right now (5-10%). Tesla is seeing local users potentially making that demand level skyrocket (simple math shows you this). Thus they send the letters as a soft way to try to get people to change that (stop thinking they are entitled to it) BEFORE that happens.

If the costs have already reached unsustainable levels as you are implying, Tesla would not only be sending letters (which requires voluntary cooperation).

Local users will rarely ever use the superchargers – local users will charge their cars at home. I intend to buy a model 3 unless there is a better option when they become available. I personally am looking forward to being able to charge at home. I expect local usage to be about 1% or less.

“Immaterial” = Legally, we don’t have to disclose the numbers in our corporate filings with the SEC. Immaterial does not mean the extremely low amount . . . it just means below the threshold of having to disclose it publicly. And that can be a pretty large amount.

I agree with you for the most part. Something has to give, but I don’t think value of time has much to do with it. People like that don’t use Superchargers anyway; they just take the Audi. The Model 3 will be at high end of the mass market, not for high school students with nothing better to do than hang around charging their cars.

Audi Q6 charges already with 150Kw, which means 50 minutes from 0-100%..and I guess by 2018 there are lot of fast chargers at least in Europe.

On paper only.

Audi/VW has been king of the EV press release showing vaporware. They can easily claim anything in a press release. Let’s see them actually deliver something. They can show 150 kW charging in a lab with batteries that can’t actually go into a product today.

About superchargers, it seems there are two kind of people. Either EV’s enthousiast, few and fully dedicated. Should they be asked to charge a Tesla by them riding a bicycle for 1000 hours probably they would approve. Then there are the others. For practicality sake, probably “the others” would require at least one supercharger for every 10 fuel stations to start considering an EV. For example between Capital city Luxembourg (where i live) to other European capital city Brussels, number of supercharger is…0.
There should be 5 at least (150 miles). No propietary system will ever have “normal” population inclined to buy EV’s as it would just be way to expensive to build such a network. Future belongs to a shared fast chargers network, hundreds of thousands of them worlwide.

I can see why there should be some SC coverage between BRU and LUX, although simply having local SC in BRU and LUX would seem sufficient since 150 miles is easily within range of any of Tesla’s current models. I don’t see how you come up with “5 at least”.

I’ll grant you this doesn’t become obvious until you’ve been driving one for a while, so it’s an impediment to new sales. For now.

Luxembourg-Brussels approx. 230 km
Luxembourg-Paris is approx. 390 km

range of TESLA S70D is 442 km (NEFZ)

so you should be able to reach Brussels without any problem without the need to charge. Even Paris would be doable without the need to charge…

I assume the issue is with same-day return trips.

Well, there is one if you take the Wallonia freeway to the west after Namur and then join Brussels southwards. You will pass at Nivelles Sud where there are 8 gorgeous brand new superchargers replacing two older ones.

Of course, for you, it would be interesting to have 8 extra superchargers somewhere south of Namur. For example, at Redu near the Space camp, which would be kind of cool.

This is absolutely money well spent for Tesla. This network will be the main reason someone will buy a model 3 over any other 200+ mile EV competitor. I’d be willing to bet that future cars (Model 3 included) will not include supercharging in the price. There may be an option for unlimited supercharging ($2-3K?) or maybe there will be no option at all. Personally I would rather pay as I use it then have to pay a lump sum up front. With a 200+mi EV I would likely only need the supercharging network a few times a year for doing road trips and in those instances, I’d be happy to pay $25 for a charge.

$139.8 million well spent

One of Elon’s smartest moves was to build the superchargers. It is a small expense (compared to the cost of tooling up a factory to build cars) and adds a HUGE amount of value to the end product.

Putting it another way. What would you rather have
1) Tesla as is with the superchargers
2) No superchargers and the company has an extra $140m in the bank

Hear, hear. This is probably the most-misunderstood thing about Tesla.

It’s amazing how many people know better than Tesla what Tesla “should” do. Plenty of examples right here in the comments.

Yeah, the Tesla Supercharger network was genius. At first I thought they were stupid because they didn’t just go with the standard. But there was no standard at the time. Maybe Chademo was around but it was too slow.

So they developed their own standard and made it really fast.

It was a huge gamble. The company could have easily crashed & burned. But since they didn’t and they kept investing in the SC network, they now have an advantage that no other car company has (unless they license access to it from Tesla): a nationwide really fast-charging network of charging stations. This is probably the biggest advantage they have over everyone else.

Next up will be the gigafactory. With the Supercharger network & the Gigafactory, I don’t know how other car companies will be able to compete even if they design some great EVs.

I’m sure Nissan and GM could have thought of a “better” standard than J1772, too. They didn’t, because they prioritized standardization over their personal engineering wishlist. The same cannot be said for Tesla.

A lesson about the limits of standardization there, I suppose.

I don’t know what book value means. $140m divided by the 70,000 Model S sold is $2,000 that is baked into price.

I wonder how much money Tesla will make per quarter off of their solar Supercharger build-out, once the costs of installing the solar panels have all been paid for?

Tesla has said that at some point the supercharger network as a whole is planned to become a net positive electricity generator. Everybody keeps thinking of this as purely an expense. But between becoming a net energy generator, and getting some money from other manufacturers who will have to eventually cave and pay Tesla to join their network.

Frankly, I see this as a major investment with its own ROI to be calculated, not just purely an expense.