The Business Behind Tesla’s Open Supercharger Network: Charging Ford EV Owners a Premium
Tesla’s decision to open its Supercharger network to other automakers is not only a significant move for electric vehicle (EV) adoption but also a strategic business move. The Supercharger network has been a key advantage for Tesla in the North American EV market, serving as a moat that sets it apart from competitors. While other automakers relied on third-party charging networks, Tesla built its own network, which is widely recognized as the best, most extensive, and reliable one.
By developing its own charge connector early on, Tesla unintentionally created a moat around its Supercharger network. This allowed Tesla to sell its electric vehicles and maintain customer loyalty, as Tesla owners would have difficulty switching to another automaker and losing access to the Supercharger network. However, Tesla’s intention was never to use the network as a moat; it simply happened as a result of its early adoption of the charge connector, known as NACS.
In 2022, Tesla opened its NACS charge connector to make it the new industry standard in North America. All automakers eventually adopted this standard, with Ford being the first to join. As a result, Ford EV owners became the first non-Tesla owners to gain access to the Supercharger network. While initially requiring an adapter, the NACS charge connector will soon become standard in all vehicles, allowing almost all EV owners in North America to use the Supercharger network.
The opening of the Supercharger network to other automakers has shed light on the business behind it and Tesla’s approach. Previously, Tesla did not charge its own owners for using the Supercharger network; it was seen as a perk to enhance the ownership experience. However, as Tesla’s fleet grew, the company began implementing charges for Supercharger usage.
Now that Ford EV owners are using the Supercharger network, it has become evident that Tesla is charging them differently than its own EV owners. Analysis of charging costs at various stations in the US and Canada reveals that Tesla is charging Ford EV owners approximately a 30% premium per kilowatt-hour (kWh) of charging at Superchargers on average. This premium can quickly add up, resulting in higher costs for Ford EV owners.
To address this, Tesla offers a solution in the form of a Supercharging membership for non-Tesla EV owners, including Ford’s EV owners. By paying a monthly fee of $13, these owners can access the Supercharger network at the same price per kWh as Tesla owners. This membership can be a cost-effective option for those who frequently use the Supercharger network, potentially saving them money in the long run.
Looking ahead, the potential popularity of Supercharger memberships for non-Tesla EV owners is significant. With over 2.5 million electric vehicles currently on US roads, most of which are Teslas, the Supercharger membership is not applicable to them. However, industry projections estimate that the number of electric vehicles in the US will exceed 10 million by the end of the decade. This presents an opportunity for Tesla to sell Supercharger memberships to as many as 1 million EVs in North America alone.
If Tesla achieves this, it could generate revenue of $13 million per month or $156 million per year from non-Tesla EVs using the Supercharger network in North America alone. When considering global expansion and the inclusion of Tesla’s own EVs, the Supercharger network has the potential to become a $10 billion business annually. Last year, Wedbush estimated that Tesla’s Supercharger network could generate $10 to $20 billion per year by 2030.
In conclusion, Tesla’s decision to open its Supercharger network to other automakers not only promotes EV adoption but also presents a lucrative business opportunity. By charging a premium to non-Tesla EV owners and offering Supercharging memberships, Tesla can generate significant revenue from the growing number of electric vehicles on the road. The Supercharger network has the potential to become a multi-billion-dollar business, further solidifying Tesla’s position in the EV market.