TSLA Stock: Charger Network Could Be The Real Money Maker

by Aaron Levitt | January 31, 2014 9:59 am

For investors in electric-vehicle maker Tesla (TSLA[1]), the name of the name game has been its automobiles.

tesla tsla stock[2]Let’s face facts, TSLA’s cars have basically brought “sexy” and performance to a relatively boring segment of the automobile marker. So it’s no wonder why — even with their steep $75,000-plus price tags — consumers have been snapping up roadsters and sedans.

However, there has been one major hurdle for TSLA stock and its cars — range anxiety[3].

The problem is that many motorists have a fear about driving their plug-in battery electric vehicles (BEVs) long distances and running out of “gas.” Tesla’s cars are no different, even with their above-average miles-per-battery life.

Simply put, many consumers believe that there aren’t enough places to “fill-up” on a long road trip. And with some BEV’s only getting about 75 miles per full charge, this fact is hindering widespread adoption of electric vehicles.

Well, for owners of a Model S, TSLA now has you covered from coast-to-coast[4].

Tesla’s newly launched country-wide supercharger network could finally be the catalyst needed to push TSLA stock and its vehicle sales into the stratosphere.

Charging Your TSLA From L.A. To New York

Despite the EPA-rated range of 265 miles-per charge for the TSLA Model S, range anxiety is still a huge factor when looking at Tesla’s future sales. Well, that was the case until TSLA upended the automobile market once again.

TSLA and SolarCity’s (SCTY[5]) Elon Musk announced that the BEV maker has expanded its U.S. network of rapid chargers to create a charging corridor. That corridor will allow TSLA motorists to drive their cars from coast-to-coast for the first time — great news for TSLA stock.

According to Tesla’s website[6], the BEV producer has currently more than 71 stations across North America — extending from New England to Washington state and dipping as far south as Florida. Overall, TSLA and Musk estimate that about 80% of the U.S. population will be covered by the new network of chargers.

That number will jump to 98% of the U.S. population by the end of 2015 as Tesla expands the charger network. TSLA has similar plans for a European expansion of a charger network, in order to help juice sales on the continent.

Aside from the fact that drivers of Tesla products will be now be able cruise pretty much anywhere they want, the key is that they will be able to do it in a fraction of the time.

TSLA’s network isn’t just about run-of-mill BEV chargers. The real innovation lies within its patented Superchargers. These Superchargers will allow a Tesla Model S to charge to a 50% charge in just 20 minutes or 80% charge in 40 minutes.

That makes them roughly 16 times faster than a public charging station from AeroVironment (AVAV[7]). A regular house-based charger takes around 9 hours to fully charge a Model S.

And if that wasn’t fast enough, TSLA is piloting a program that will allow for Model S drivers to “swap-out[8]” their lithium batteries for fully charged ones at several of its Supercharger stations. Similar to how people switch out spent propane tanks for their grill, the battery swap will take a whopping 90 seconds and only cost around $60 bucks.

A TSLA Stock Game Changer

For TSLA stock, the Supercharger network and battery swap system can be seen as the final piece of Tesla’s accession.

Eliminating range anxiety for its car models will only strengthen future Tesla sales. When it comes down to it, which would you rather buy — a Nissan (NSANY[9]) Leaf with a 75 mile range and no chance for filling up on the road, or a TSLA vehicle that you can actually use as a “real” car?

I’d bet most people looking into owning an electric vehicle would choose a Tesla. Autoblog Green editor Sebastian Blanco perhaps said it best[10] by acknowledging that TSLA is “kind of making the rest of the industry look bad.”

And all of this is positive for TSLA stock.

While it’s too early to predict just how many sales the charger network will add, it certainly represents a nice bit of P.R. for TSLA stock. At the the end of the day, the removal of the range anxiety problem will ultimately translate into more sales at the company in the future and justify the lofty share price of TSLA stock. Share price continues to surge, and investors are expecting a lot of growth out of TSLA stock.

Yet, the Supercharger network shows just how serious Musk and TSLA is getting their vehicles into the hands of the masses and supplying that growth. Now if they could only get the price per vehicle down, TSLA stock could be unstoppable[11].

The best days could still be ahead for TSLA stock.

As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.

Aaron Levitt is an investment journalist living in Ohio. With nearly two decades of experience, his work appears in several high-profile publications in both print and on the web. Also likes a good Reuben sandwich. Follow his picks and pans on Twitter at @AaronLevitt[12].

Endnotes:

  1. TSLA: http://studio-5.financialcontent.com/investplace/quote?Symbol=TSLA
  2. [Image]: https://investorplace.com/wp-content/uploads/2013/10/tesla-tsla-model-s-185.jpg
  3. range anxiety: http://www.autonews.com/article/20131015/OEM05/131019939/electric-car-rentals-hampered-by-range-anxiety#axzz2rtEDRnJQ
  4. coast-to-coast: http://business.financialpost.com/2014/01/27/tesla-motors-expands-charging-station-network-to-permit-long-distance-trips-coast-to-coast/?__lsa=3e88-27fa
  5. SCTY: http://studio-5.financialcontent.com/investplace/quote?Symbol=SCTY
  6. website: https://www.teslamotors.com/supercharger
  7. AVAV: http://studio-5.financialcontent.com/investplace/quote?Symbol=AVAV
  8. swap-out: http://www.reuters.com/article/2013/06/21/us-tesla-swap-idUSBRE95K07H20130621
  9. NSANY: http://studio-5.financialcontent.com/investplace/quote?Symbol=NSANY
  10. said it best: http://autos.aol.com/article/tesla-wins-technology-of-the-year-award/
  11. could be unstoppable: https://investorplace.com/2014/01/tsla-stock-elon-musk-scty-ebay
  12. @AaronLevitt: https://twitter.com/AaronLevitt

Source URL: https://investorplace.com/2014/01/tsla-stock-superchargers/