Tesla Addresses Range Anxiety Head On

By expanding its charging infrastructure rapidly, Tesla is taking range anxiety seriously.

Jan 27, 2014 at 1:31PM

John and Jill made history this weekend. The couple was the first to drive across the U.S. using only Tesla's (NASDAQ:TSLA) free Superchargers.

Tesla sent its own teams on the same trip this weekend to set a cross-country, electric-vehicle, or EV, speed record. The attempt culminates the completion of Tesla's cross-country Supercharger route.

As Tesla rapidly expands its Supercharger network, Tesla is proving long-distance travel in EVs doesn't have to be as big of a problem as it is made out to be.

Tsla Superchargers

Tesla Supercharger. Source: Tesla Motors.

Solving range anxiety
Owning an electric car is a far different experience than owning a traditional gas-powered vehicle. One of the major differences cited in several studies is owner range anxiety, or the fear of running out of charge before you've reached a charging station. But as Green Car Reports has noted, range anxiety usually fades after a couple of weeks of ownership, once owners get used to their vehicle and daily usage patterns.

But if range anxiety doesn't fade until an owner drives his vehicle, what about those who are considering buying an EV? How can auto manufacturers address their range anxiety? One way is to build out the infrastructure necessary to easily support long-distance travel.

This is where Tesla's value proposition differs dramatically from its electric peers. For the typical manufacturer of fully electric vehicles it's more difficult to build this network than it is for Tesla. Consider the Nissan LEAF, for instance. The vehicle has a maximum range of 75 miles. Compare that to Tesla's lowest-range, 60-kWh Model S with an EPA rated range of 208 miles -- or its 85-kWh model with 265 miles of range. Obviously Nissan would need more than twice as many charging stations as Tesla to offer the same level of charging convenience.

Of course Tesla has already made enormous progress on its Supercharger network, attacking range anxiety head on. Going from just six Superchargers in the U.S. in September 2012 to 71 today, Tesla now has charging stations within range of approximately 80% of the U.S. population. Further, it has energized the important East Coast, West Coast, and cross-country routes. And keep in mind that Tesla's Superchargers are approximately 16 times faster than most public charging stations, providing a 50% charge in 20 minutes and an 80% charge in 40 minutes.

What's next?
Whether range anxiety is a serious problem or not, Tesla is treating it like it is. The company is expanding just as aggressively in every market it enters. Its European expansion is already under way and now it has announced it will take the network to China, too.

In a logical step, Tesla has also essentially arranged a dependable source of cash to help finance the expansion of its Supercharger network. While its higher-margin, 85-kWh model comes with free supercharging for life, the 60-kWh model requires customers to pay $2,000 up front or $2,500 after delivery.

While the expanding charging infrastructure certainly helps strengthen the sales pitch for Model S vehicles, it also is beginning to set the stage for Tesla's planned affordable electric vehicle -- a crucial step for the company in living up to its bullish $20 billion market capitalization. So the rapidly expanding charging infrastructure may be exciting, but it's also a necessary step for Tesla to live up to its audacious promises.

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Fool contributor Daniel Sparks owns shares of Tesla Motors. The Motley Fool recommends Tesla Motors. The Motley Fool owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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