Tesla Addresses Range Anxiety Head On

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.

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.

They said it couldn't be done.
But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.


Read/Post Comments (3) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 27, 2014, at 2:00 PM, Decoy0527 wrote:

    Time will tell whether or not Elon Musk is a genius businessman, but we do not have to wait to determine if he is a genius at marketing and public relations. No one, friend or foe, will dispute that.

  • Report this Comment On January 27, 2014, at 2:45 PM, gjsuhr wrote:

    I spotted this story on Yahoo today (1/27/14):

    The first Porsche car ever built was unveiled in Stuttgart on Monday. The 1898 "Egger-Lohner electric car model C.2 Phaeton," or in short P1 has been sitting in an old shed in Austria since 1902. (Jan 27)

    So....Porsche started out building electric cars 116 years ago. I suspect if they thought batteries were the wave of the future, they could build them in serious numbers today.

  • Report this Comment On January 27, 2014, at 3:41 PM, VoiceintheCrowd wrote:

    gjsuhr:

    Maybe, but maybe not. There is such a thing as an idea whose time has not yet come. If asteroid mining is a viable economic business model in 2130, does that mean that everyone who decided against trying it in 2014 was shortsighted, or does it mean that the tech pioneers of 2014 were aware of their limitations?

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2810928, ~/Articles/ArticleHandler.aspx, 9/16/2014 9:46:06 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement