Tesla Motors, Inc. Stock Jumps on News of Possible Charging Collaboration

Last week the response to Tesla's (NASDAQ: TSLA  ) announcement that it would be opening up its patents to competitors who would use them "in good faith" was somewhat flat. Would helping competitors hurt or help Tesla? The market couldn't seem to make up its mind. But now, with more related news on the matter, the market seems to be getting enthusiastic about the bold move.

Tesla stock is up about 3% this morning (at the time of this writing) after Financial Times author Henry Foy reported that Tesla, Nissan, and BMW, the world's three largest manufacturers of electric vehicles, are in "keen talks" regarding a new level of collaboration on charging networks, according to sources at all three companies.

Model S charging at a Tesla Supercharger station. Image source: Tesla Motors.

"It is obviously clear that everyone would benefit if there was a far more simple way for everyone to charge their cars," one executive, who declined to be named, told FT.

Range anxiety
One of the most frequently cited consumer concerns about electric vehicles is range anxiety. The combination of fully electric vehicles that don't get as much range on one charge as some vehicles get on one tank of gas with a charging infrastructure that is still in its early days can cause potential electric vehicle buyers to fear the charging experience while traveling -- especially for long distances. This concern has been appropriately coined range anxiety.

Tesla, of course, has been addressing the problem with vigor. It has expanded its Supercharger network from just a handful of stations in California a couple of years ago to one that enables coast-to-coast travel.

Map of active Supercharger locations in the U.S. Image source: Tesla Motors.

By the end of the year Tesla plans for its network to be within range of 80% of the population. By 2015, nearly the entire U.S., or 98% of the population, will be within Tesla driving range to the expansive network.

But despite Tesla's aggressive expansion of charging stations, there are still considerable obstacles for the electric vehicle industry as a whole to overcome to rid range anxiety once and for all.

Compatibility issues
Elon Musk explained at the annual shareholder meeting earlier this month that it is not necessarily patents holding its peers back from tapping into Tesla's Supercharger network. Musk said he has been willing, for some time, to let peers tap into the network as long as they contribute their fair share of related capital in building out the network. But not one company had expressed interest in doing so before the annual shareholder meeting.

Image source: Tesla Motors.

The problem? No manufacturer has yet to make a vehicle that can handle a 135-kW charge, Musk says. The prerequisite is understandable. After all, the Superchargers are known for their superior charging speed for Tesla-branded vehicles that have far more range than any other available electric vehicles on the market. The charging stations will give Tesla's 265-mile-range batteries a 50% charge in 20 minutes and an 80% charge in 40 minutes. The station will juice the Model S 16 times faster than most public charging station, Tesla claims. 

Even if peers could tap into the current Supercharger network, it would be far less useful for peers as it is for Tesla owners. Since Tesla's two battery options for its Model S get 208 and 265 miles of EPA-rated range, the charging stations don't need to be nearly as close together as they do for a car like the Nissan LEAF to benefit from on a long distance trip. For instance, in January, Tesla said its cross-country Supercharger network route had about 120 miles of spacing between each location. The density even enables owners to skip charging stations on the network while traveling across the country, if they want to. But the Nissan LEAF's limited range of 84 miles means that owners would have to stop at other non-Tesla charging stations to travel long distances.

Solving the deep-rooted problems in the current charging network for electric vehicles won't be easy. And the likely demands that Tesla will offer, including a "free forever" approach to charging and 135-kW capabilities, present interesting hurdles. Will newly available patents from Tesla give peers the needed boost to get the ball rolling on a new level of collaboration on electric vehicle technology?

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Read/Post Comments (7) | Recommend This Article (18)

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 June 16, 2014, at 3:09 PM, Petronilus wrote:

    If driving cross-country is your desire, stay with your gas powered car for now. For the rest of us >90%, EV is becoming quite viable when the range is >200 miles.

  • Report this Comment On June 16, 2014, at 4:13 PM, ConstableOdo wrote:

    Ha. Can't drive to and from Texas in a Tesla. How sad.

  • Report this Comment On June 16, 2014, at 5:25 PM, JohnFredriksen wrote:

    CO,

    By the end of this year, that will have changed. By next year, the entire country will be pretty much covered. See http://www.teslamotors.com/supercharger

  • Report this Comment On June 16, 2014, at 6:13 PM, pmanson wrote:

    If true, this is a very welcome development in the move towards broader use of EVs. The charging infrastructure for Tesla drivers is already excellent: a modest-cost charging station at home providing daily charging for 90% of the typical owner's driving, and the expanding supercharger network for free charging on long trips. This kind of move will give the same benefits to drivers of other EVs.

    Note to the author: great article, but you meant 135 kW, not kWh. kWh is energy (e.g. storage capacity of a battery) and kW is power (e.g. the rate of charging a battery or discharging it to drive a motor).

  • Report this Comment On June 16, 2014, at 6:23 PM, phillipzx3 wrote:

    "Ha. Can't drive to and from Texas in a Tesla. How sad."

    Go to the website "www.plugshare.com" and zoom in on Texas (San Antonio, Fort Worth, Dallas and Houston).

    While not up to the amount of charging stations we have on the west coast, Texas is doing a pretty decent job "representing," considering it's oil country.

    :-)

  • Report this Comment On June 16, 2014, at 7:42 PM, TMFDanielSparks wrote:

    Also, another catalyst for the stock today: earlier than expected model x production http://www.fool.com/investing/general/2014/06/16/earlier-mod...

  • Report this Comment On June 16, 2014, at 11:44 PM, CraigWPowell wrote:

    TSLA jumps +8.8 % today and more than +20% since this positive forecast published on May 11th: http://seekingalpha.com/article/2263503-tesla-stock-forecast...

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