Tesla Motors Inc.'s Infrastructure Advantage

Electric-car maker Tesla Motors (NASDAQ: TSLA  ) has a lot going for it. So much that the market demand for Tesla stock in the past two years has run up the price by more than 600%. A wildly successful Model S launch has given investors enough confidence to value the company at $26 billion -- almost half of General Motors' $55 billion market capitalization. But can Tesla really become a mass-market player? While it won't be easy, Tesla does have one major advantage on its path to competing with the big dogs.

Model S. Source: Tesla Motors.

Tesla's hidden infrastructure
Tesla's Supercharger network is impressive. The Tesla-branded charging stations will juice a Model S to a 50% charge (132.5 miles of range) in just 20 minutes, or an 80% charge in 40 minutes. These stations, which offer Tesla owners free charging for life, are rapidly proliferating. Today, Tesla owners can travel up and down the West and East coasts and across the country. By 2015, the company plans to have charging stations within driving range of 98% of the U.S. population.

Tesla's planned corridors for Supercharging stations to be open for use by the end of 2015. Source: Tesla Motors.

This planned network puts the most optimistic scenario for potential hydrogen fuel cell fueling stations by 2015 to shame.

But Tesla's map of planned Supercharger stations drastically understates the company's infrastructure. Tesla's greatest asset, in fact, may already be in your home: your electricity.

As it turns out, charging at home is sufficient for the majority of travel. A 2012 study by two doctoral students at the School of Engineering and Applied Science at Columbia University estimated that the average daily driving for urban-based cars is 36.6 miles and the average for rural-based cars is 48.6 miles. Both figures are well below the EPA-rated range of Tesla's 60-kWh and 85-kWh versions of its Model S, with ranges of 208 and 265 miles, respectively.

A charging Model S. Source: Tesla Motors.

After installing a 240-volt outlet, Tesla owners have plenty of power to wake each morning with a full charge. On Tesla's website, it says owners can get a 265-mile charge in nine hours using a 240-volt outlet. However, if owners pair a Tesla Wall Connector with its Dual Chargers option, they can fully juice their Model S in half that time.

Tesla has some tough challenges ahead, like building the manufacturing capacity to support sales of its lower-cost vehicle after it launches in 2017 so that the company can hit the planned level of 500,000 vehicles per year by 2020. But infrastructure is among Tesla's easier obstacles to overcome. Not only is it readily possible for owners charge their vehicles at home, but advancements in solar panel technology will likely improve the costs of charging electric vehicles over time.

The ease with which Tesla can tap into existing infrastructure gives its electric vehicles an edge over fuel cell technology, and also brings it one step closer to becoming a mass-market player.

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Read/Post Comments (11) | Recommend This Article (2)

Comments from our Foolish Readers

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  • Report this Comment On June 01, 2014, at 4:27 PM, OliverAZ wrote:

    While the Tesla charging network is quite impressive, it will be no match for the hydrogen infrastructure that is being built right now. A 20 minute or 40 minute charge does not sound so bad, unless there are 5 cars ahead of you in line.

    Let's face it, battery electric car sales are on the decline, because those people who are willing to put up with the inconveniences have already bought one. The rest of us are waiting for fuel cell cars.

  • Report this Comment On June 01, 2014, at 6:03 PM, Ustauber wrote:

    You must consider that if a hydrogen car blows up,

    It will clear 2 square blocks.

    Imagine just how much your car insurance will

    Cost if you have a hydrogen car to cover this type

    Of massive destruction.

    Also the cost of hydrogen compare with gas and the range would make no sense.

    ThxTSLA

  • Report this Comment On June 01, 2014, at 6:56 PM, trsho wrote:

    One thing that no-one seems to consider is that, as soon as there are substantial sales of electric vehicles, governments will figure out how to tax the charging so their revenue will be the same per mile driven as if they were gas powered. This could easily double the cost of charging your car.

    In case you haven't noticed, there is already a movement in place to increase gas taxes because we are buying more fuel efficient vehicles.

    While I agree that we have to pay for roads somehow, like gas taxes, those funds will not be earmarked for road infrastructure and will likely be squandered on pork barrel projects.

    At least we all should push for legislation that forces the taxes on gas and electric car charging to be spent on road infrastructure.

  • Report this Comment On June 01, 2014, at 6:58 PM, Johnny04 wrote:

    OliverAZ, Tesla CTO JB Straubel said it's possible to reduce the charging time to 5-10 minutes. I think they are waiting for their own battery factory to produce that kind of battery. From what I gather, Tesla still has a lot up its sleeve.

    Also, if there are 5 cars ahead of you in line, Tesla will likely build another supercharging station nearby. It builds these stations according to the demand, not just distance from one station to another.

  • Report this Comment On June 01, 2014, at 7:10 PM, Johnny04 wrote:

    trsho, we subsidize $14-$52 billion dollars on fossil fuel. If we switch to electric, we can use those subsidies for road infrastructure.

    http://priceofoil.org/fossil-fuel-subsidies/

  • Report this Comment On June 01, 2014, at 9:48 PM, ToddRLockwood wrote:

    @OliverAZ I don't know where you heard that electric car sales are on the decline. That certainly isn't the case at Tesla, who is now delivering cars in Europe and China. A right-hand-drive version of the Model S will debut this week in the UK.

    As for inconvenience, the Model S is anything but. I've driven 20k mikes in one without the hassle of stopping at gas stations. In 14 months I've only used a Tesla supercharger only once. I do my charging in my own garage at night, and every morning I'm greeted by a "full tank." Over the past year, I've saved $2,500 vs. filling a comparable gasoline powered car. What's not to like?

  • Report this Comment On June 01, 2014, at 9:54 PM, Kuma48 wrote:

    Battery technology is rapidly improving. For example the new carbon/carbon batteries recharge more rapidly, do not require cooling, have little fire risk, and last for more than 3,000 recharge cycles. Carbon/carbon batteries can also be built on the same production lines that currently build Tesla lithium-ion batteries.

    Fuel cells tend to be problematic and hydrogen poses very high risks of explosion and it weakens metals and is likely to leak. And hydrogen refilling stations are very expensive compared to Tesla supercharger stations.

    I think some car companies are pushing hydrogen fuel cell cars to perpetuate their high profit parts replacement and planned obsolesce business models.

    Durable battery electric cars like the Tesla S require little maintenance and few replacement parts. Electronic updates constantly add features and improve all Tesla Model S cars everywhere, destroying the idea of planned obsolesce.

    Oil companies fear battery electrics because these cars can be recharged daily with roof top solar panels. Driving on solar power would save each consumer thousands of dollars per year compared to gasoline powered cars.

    By contrast hydrogen fuel cell cars need a centralized distribution network with expensive filling stations, and hydrogen is currently produced from natural gas. All of this would perpetuate oil company business models.

    Hydrogen fuel cell cars would bail out the big oil and car companies.

    Solar powered battery electric cars are much better for the people and the planet.

  • Report this Comment On June 01, 2014, at 10:45 PM, 4mul8r wrote:

    I just read a blurb that Tesla had a bad sales result. Is this the time to buy?

  • Report this Comment On June 02, 2014, at 1:13 AM, Asmodeus42 wrote:

    The total number of Hydrogen fueling stations in the US is...

    wow, way more than I had thought. 58, an average of just over one per state.

    There are more than 5,200 EV Public charging stations in the U.S., and most houses have multiple outlets.

  • Report this Comment On June 03, 2014, at 3:40 AM, borlock wrote:

    OliverAZ.

    "A 20 minute or 40 minute charge does not sound so bad, unless there are 5 cars ahead of you in line."

    I rarely (dare I say never) have 5 cars ahead of me in my own garage, and that's where I charge 99% of the time.

    I used to spent 8 hours per year pumping gas. I know spend 2 hours per year charging (and it's MUCH cheaper).

    Why on earth do you want to go backwards to needing to go to a gas station every couple of weeks.

    It's like saying: "Hey cool, I can give you a cellphone that lasts 2 weeks, but you have to go to AT&T every 2 weeks to have it recharged". Nobody would buy that phone. Why on earth do you still want to have a car that behaves like that?

    It doesn't matter that it only takes 5 minutes, having to regularly refuel somewhere is always a pain.

  • Report this Comment On June 03, 2014, at 4:20 AM, envpilot wrote:

    Hydrogen fuel cell infrastructure and customer experience is a huge hassle compared to battery electric cars.

    As the author points out, you already have electrical outlets in your house and superchargers are getting faster and faster.

    I've had a Model S for over a year and I charge at home 99.9% of the time.

    Get home, plug it in, forget about. It takes 5 seconds.

    Infinitely more convenient than the hassle of driving to a hydrogen filling station, waiting in line etc.?

    Also, with the Tesla, I could get a $45 adapter to plug it into my 240V dryer outlet, so it charges fast, even at home.

    Oh and we have the EV electric rate, so it's dirt cheap to "fill up". 10-15 cheaper than driving a comparable gasoline car.

    But the real savings are in the near total lack of maintenance.

    I've spent tens of thousands of dollars on maintaining my old gasoline cars over the years.

    I've spent 0 dollars on Tesla maintenance.

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