While the proposed acquisition of SolarCity Corp (NASDAQ:SCTY) by Tesla Motors Inc (NASDAQ:TSLA) continues to draw out more critics than supporters — mostly owners of Tesla stock who don’t want their company to buy a potential money pit — it’s not the only thing Tesla’s got going on right now.
Rumors of another rather compelling partnership with Tesla Motors not only opens the door to creating more demand, but in a bigger philosophical sense confirm that CEO Elon Musk understands he’s going to have to work with the world rather than against it if electric vehicles are ever going to become a mainstream reality.
In Bed With Sheetz?
Ever heard of Sheetz? Unless you live in the United States’ eastern time zone above “the south” and below the northeastern part of the nation, you probably haven’t. For people from North Carolina to Ohio to Pennsylvania though, Sheetz is a familiar, friendly filling station … for both fuel tanks and stomachs.
The gas station company is 437 units strong, and has earned its reputation as a clean and complete convenience store chain.
As for what this has to do with Tesla Motors, the buzz is that Tesla is in talks with Sheetz to install charging stations at at least a few of its locales. Tesla Motors has made no official statement on the matter, though Sheetz Vice President Michael Lorenz commented “We’ve had discussions with them about putting their chargers in our stores. We haven’t done anything yet, but we’re continuing those discussions.”
It’s not a tough premise to believe, however. Sheetz already offers recharging services for some electric vehicles. Installing Tesla-compatible equipment would only require a little time from an installation crew; the technology already exists.
Likewise, Tesla charging stations have already popped up all across the country, mostly at hotels, restaurants and shopping centers.
Ironically enough though, an affiliation with gas stations is the one partnership that hasn’t been well-cultivated yet even though it’s the one that could make Tesla vehicles considerably more functional for a huge swath of would-be buyers.
Logistic Hurdles (Mostly) Leaped
While few would deny that electric vehicles are the future and that Elon Musk has made them ridiculously cool, with a range of 300 miles and a typical full-recharge time of several hours rather than just a few minutes, Tesla vehicles just don’t get the job when a driver has to make the occasional long trip. Long drives and/or overnight stops that have to be planned in advance just aren’t feasible.
A supercharging station at a convenience store, however, would whittle that time down to an hour or less — much less if a driver doesn’t need a full charge — and a with a venue like Sheetz, the annoying aspect of an electric vehicle isn’t quite so annoying. It will be even less of a nuisance if and when the recharge time is brought down to five minutes, as Musk has suggested will eventually be the case.
Bottom Line for Tesla Stock
Although the five-minute recharge is still closer to a dream than a reality, such a technology isn’t out of the question now. In the meantime, a sub-hour recharge at a filling station — where there’s at least something to do besides wait — en route from point A to point B makes Tesla’s cars a great deal more functional for yet another segment of drivers.
And that’s what should excite owners of Tesla stock … one of the products’ biggest drawbacks has been reasonably well addressed, with good reason to think it will be very well addressed in the foreseeable future.
Sheetz is just the beginning too. With electric vehicles expected to account for a substantial part of the new car market by 2020, filling stations will want recharging capabilities as much as electric car makers will want them to have them.
Think, not unlike the way company names Xerox and Google turned into verbs, this new vertical for Tesla charging stations helps make it synonymous with electric cars. That’s an enviable position.
It may not be quick or easy, and Musk may have ruffled more than a few feathers with his nepotistic, self-serving idea of acquiring SolarCity. But, Tesla’s cars are truly revolutionizing the way we think about automobiles and the travel they facilitate. If nothing else, that bolsters the bullish case for Tesla stock.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
