Revenue. Automakers did not build their own networks, so they must now contribute to have access to something required to encourage EV sales.

Gas stations (very roughly speaking! lots of Superchargers are colocated at grocery stores, malls, and other places humans can comfortably dwell for 15-30 min) don't want to front the hundreds of thousands of dollars per station for the equipment, so Tesla did. Paid for out of Model S and X margins early on, and more recently through profits from total sales.

> “To dive deeper into this sum-of-the-parts valuation, we modeled & projected out Tesla’s supercharger network, taking into account access & revenues from other OEMs using stations across the United States. Ultimately, we estimate that Tesla’s supercharger business will be roughly 3%-6% of total revenues, translating to a $10 billion – $20 billion business by 2030.”

https://www.teslarati.com/tesla-tsla-20b-revenue-access-supe...

Also, not being abandoned. If the rest of the industry coalesced around CCS, Teslas would be at a disadvantage. Knowing the value of the Supercharger network, this guaranteed Teslas already on the road wouldn’t need an adaptor as often.

NACS is CCS with Tesla's plug on the end. The industry has coalesced around CCS.

> NACS is CCS with Tesla's plug on the end

This description confuses me...

The DC+, DC-, and GND pins look to correspond. But NACS has 2 other pins. CCS1 has 4 other pins, and CCS2 has 6 other pins.

I assume there is some protocol on the other pins. A supercharger can read the car's VIN, for example. And some power/charge-state negotiation? Is all of this excluded from the NACS spec? Do CSS1 and NACS have compatible negotiation protocols?

I'm watching this now: https://m.youtube.com/watch?v=ZJOfyMCEzjQ&t=162s

The extra 2 pins on NACS are the ones that carry the CCS communications protocol. (CP and PP pins)

The CCS1 has the CCS communication pins, a big DC- and DC+ pin, and also three extra pins for AC slow charging (Line 1, Neutral or Line 2, and Protective Earth/communications ground). CCS2 has the DC pins, the communication pins, AC lines 1, 2, and 3, AC neutral, and protective earth/communications ground.

NACS has DC+, DC-, CP, PP, and a ground. Instead of sticking the bulky AC->DC converter in the car, NACS vehicles stick it in the charging station. That means an AC charger can't be as simple (it needs to convert to DC) but also that the car doesn't have to carry around something it only uses while charging.

NACS the DC+ and DC- pins are multi-purpose and can also support AC+/AC- (or, line1/line2. However you want to call it). There is absolutely no need to include a AC->DC converter in standard Level 2 chargers, and NACS does not do this.

NACS is slightly more complicated from a car perspective, as it requires the car to switch between DC and AC paths. There is literally no change from a charger perspective besides the handle, as chargers are not ever designed to be multi-purpose DC vs. AC.

I wonder how it's going to balance out with lost sales though. The supercharger network is no longer a Tesla-exclusive amenity, so one less reason to buy a Tesla.

Tesla has nothing to worry about. Their sales will soften due to the macro and cost of money, their margins might compress, but they are still ahead of the legacy auto folks by leaps and bounds. They can lean into energy storage and other related power control businesses, that is their strength: they are an energy and power controls company. Cars are only one of the products. Legacy auto is selling autos, and only autos. Charger access deals unlocks revenue for Tesla out of legacy auto's pockets today while legacy auto has to figure out how to sell their own EVs in the future, and what choice do they have but to pay up if they want to sell EVs?

> After a decade of being trounced by Tesla Inc., this was supposed to be the year that traditional automakers finally put up a fight for electric cars. General Motors was committing its biggest brands to a new line of electric models; Ford and Volkswagen were ramping up production of EVs designed for the masses. It was, many predicted, time for the automotive world order to re-assert itself.

> Things haven’t turned out that way. Ford’s vaunted F-150 Lightning has been outsold by the R1T from Rivian, a startup that sold its first vehicle just two years ago. GM’s lineup of new EVs has suffered crippling setbacks in battery manufacturing. In July, Volkswagen Chief Executive Officer Thomas Schaefer succinctly summarized his own company’s EV competitiveness: “The roof is on fire.”

> With just three months remaining, 2023 has been less a redemption story for legacy automakers than further evidence of their quagmire. In the US, Tesla has been expanding production about as fast as all of its competitors combined. The Austin, Texas-based EV maker accounts for 61% of fully electric cars ever sold in the US, making it more dominant in EVs than Apple is in smartphones.

https://archive.ph/jfnHS | https://www.bloomberg.com/news/articles/2023-10-05/where-is-... ("Tesla's Year of Price Cuts Exposes Crisis for Legacy Auto")

Not only that, the market for electric cars is going to overtake the market for gasoline cars. They don't need to keep 61% of the market forever -- they probably won't -- but if they held 15% of the market once >90% of new cars are electric they'd be selling more cars than they do now.

lol on that VW CEO quote. hadn't heard that one before.

> They can lean into energy storage and other related power control businesses, that is their strength: they are an energy and power controls company.

Additional citations: https://www.teslarati.com/tesla-energy-highest-margin-busine... ("Tesla Energy is becoming the company’s highest margin business: Elon Musk")

https://digitalassets.tesla.com/tesla-contents/image/upload/... ("Tesla Q3 2023 Update")

Energy stations (gas) pay pretty well. Right now Tesla owns most of the electric world and even if their cars fail could become a dominant energy provider.

Do they? I don't know what the situation is in North America, but here the business model of fuel stations is to sell fuel at near-zero margin and make the profit from impromptu sales to fuel customers in the attached convenience store.

Generally you aim for 1/3 gas, 1/3 tobacco, 1/3 snacks. While gas is by far the lowest margin, it is very high volume, with many people not buying anything else.

Fast charging stations will likely eventually do even better with the required 15-30 minute stop encouragement toward a coffee or a snack.

Probably, but since most charging will be at home, there will be a lot less total $ in play. Great gig if you can be on a route people travel long distances, but otherwise not much profit.

Margins are tight in the US, a typical gas station has margins comparable to a grocery store. Something in the neighborhood of 2% IIRC. Adding a convenience store definitely helps increase that.

Wow, this is fascinating.

> their net profit per gallon is around $0.03-$0.07–after factoring in costs like labor, utilities, insurance, and credit card transaction fees. [1]

Average store sells 3000 gallons per day [2], meaning $90 to $210/day profit.

[1] https://fortune.com/2022/08/09/energy-profit-margins-gas-sta...

[2] https://www.convenience.org/Topics/Fuels/Who-Sells-Americas-...

Tesla will never have 100% vehicle market share. Tesla benefits from there being a large network of superchargers. Having more vehicles support Superchargers will allow them to be viable in more places. More viable places for Superchargers means more superchargers, and more superchargers means more viable places for Teslas.

Could also be an interesting Pivot in the future - with more competition in the EV market (and a race to the bottom for pricing, combined with the need to get more and more batteries), maybe it's better for Tesla to get out of the car market (eventually) and into the "fuel" market.

Tesla has overall build quality problems, but AFAIK their components for battery/powertrain and charging are all state of the art.

So yeah, it's a viable pivot.

The valuation gap between that Tesla and this Tesla would wipe the company out. Fuel (however good) is a commodity, and a commodity company which doesn't own its raw materials is not a trillion dollar company.

Tesla owns a solar cell and storage battery business. This is owning the vertical integration of EV fuel. You don’t need exclusive access to the Sun any more than an oil company needs to monopolize all oil fields to succeed.

Tesla's car business doesn't exactly justify their valuation either, certainly not with their recent decline in profit margin. A comparison to other manufacturers makes them look ridiculously overvalued. The explanation, to the extent there is one, probably has to do with a (real or perceived) moat of expertise surrounding EV and battery technology that may allow (???) future innovation/expansion into new markets. I'd say there's a large chance it's all hot air, but they've pulled several rabbits out of the hat already.

Fast charging is relatively expensive. Cost per mile is close to filling up with gas. Where I live, they charge 4x what I pay to charge at home.

That makes sense, since fast charging is not supposed to be the default charging mode. Almost all charging will be slow charging.

Tesla was coming under pressure from the government and may have wanted to get ahead of potential regulation. Opening up their network also allows access to federal funding.

https://www.whitehouse.gov/briefing-room/statements-releases...

Billions in federal funding for charging stations (that they wouldn’t get if it was closed)

> I'm still not sure what Tesla gain from opening up SuperCharger for competitors.

They can actually charge for charging (rather than giving it away), and lots of people will pay for it, it also adds to their network effect (more customers for charging = more charging stations they can build).

I wouldn't be surprised if 10 years from now the US government will declare Tesla a charging monopoly and split it away from the car company.

That would require some anticompetitive behavior, you can't simply split things up because they are a monopoly.

Future behavior not-withstanding, Tesla will (correctly IMO) point at the opening up of NACS standard and the supercharger network as a defining anti-anti-competitive move.

You can split them up if they become so successful that uncompetitive behavior just falls out of it. Like people who want to split away the app store from the iPhone (regardless of the fact that other phones and app stores exist: Apple's vertical closed ecosystem makes the iPhone more popular).

More popular than what? Android is 70% global market share.

Apple had a 75% market share of phones that cost $600 or more in 2022...

If you define your market small enough anything can be a monopoly. I bet Apple has a 95% market share on phones that cost more than $1500. I bet Google has 75% market share on phones less than $100. So what?

We are talking about the App Store here, correct?

Do you think that for an App Store attached to a phone whether the phone cost $100 or $1,000 matters?

Because everyone related to those App Stores does.

Apple's control of the app store makes the $1,000 phone more appealing. If they opened up the iPhone to other random app makers, the phone would be less appealing and they wouldn't sell as much.

Profit share.

You don’t need a monopoly to be anti-competitive and get broken up because of it.

Alcoa aluminum is a counter example but that was in a different regulatory climate.

Laws are laws. That they aren't enforced sometimes is a pity, but that doesn't negate their existence. The Sherman Antitrust Act is pretty broad, and even simply "dividing markets" can be a cause for action.

For those that dislike these laws so much they would rather pretend they don't exist, I wish they would spend some time reading and understanding the context under which these laws were passed. These types of arrangements, when allowed to balloon out of proportion unchecked, cause massive amounts of damage to the average american citizen and their individual and collective long term interests.

Lassez Faire style regulation was effectively tried and it was an unmitigated disaster for the citizen, who is, and should be, protected in our Constitution while our corporations must obviously be constrained to subordination by it.

They already charge $ for charging. Free charging was only offered on select vehicles. Everyone other Tesla pays for it.

> I wouldn't be surprised if 10 years from now the US government will declare Tesla a charging monopoly.

Just asking a stupid question: isn't setting up a charging station relatively easy?

I mean is the barrier to entry not pretty low? Compared to say conventional gas stations, there are fewer dangerous things, etc.

The only barrier I see is that each charger network might want their own app, etc. Providing a poor UX. But that's entirely fixable, I already see contact-less card payments at gas stations today -- other charging networks could do the same.

What is the moat?

Tangent, I would love to see more contactless card payments available at gas stations. Using the strip is incredibly insecure. Where I live there are constant stories of people getting their details stolen via skimmers. We even have a list of gas stations to avoid paying at pump because they are so notorious for it.

Unbelievably, half the time when the NFC symbol is available on gas station machines it doesn't even work. About the only time I can reliably expect to pay contactless at the pump in Texas is at huge chains like QT and/or travel stations like Pilot/Flying J

> The only barrier I see is that each charger network might want their own app, etc.

It is noteworthy in this regard that part of the EU mandate for a charger network is "without requiring an app or subscription"... "They must also accept contactless payment and provide full pricing and live charge point availability information through ‘electronic means’ such as an app or sat nav system."

https://www.autoexpress.co.uk/news/88920/electric-car-chargi...

https://www.theverge.com/23806690/eu-ev-fast-charger-60km-la...

https://www.weforum.org/agenda/2023/07/eus-law-mandates-fast...

Getting the power company to provide suitable electric lines to your location can be a bit of a business.

Vaguely sure that Musk commented on this. Tesla gains more from growing the EV market as a whole, and faster, than trying to dominate with proprietary technology.

I think this stark advantage is mostly in the US, and mostly due to gross incompetence of Electrify America.

In western Europe there are Ionity and Fastned networks that are pretty reliable and faster than v3 Superchargers. Non-Tesla charging is generally becoming competitive and usable. Tesla still can offer better UX in areas where they have a good coverage, but other manufacturers are catching up to that too.

So maybe Tesla has realized their advantage won't last forever? Their first trial of opening up Superchargers was in the Netherlands, home of the Fastned network.

Don't underestimate the value of constant foot traffic. You are nearly forcing drivers to visit locations and stay there for at least 15 minutes. The final step is just getting them to take out their wallet.

It's definitely odd to me that a lot of the superchargers I visit on trips have zero services nearby.

Charge my car and sell me a latte!

I expected it to go in reverse. "Charge your car at the supermarket. If you spend $X with your loyalty-club card, we'll deduct $Y from the charging bill."

The customer is captive for 15 minutes somewhere, but you can certainly give him reasons to choose to be captive for 15 minutes at your store.

EV infrastructure is probably easier to deploy than gas, so I'd expect to see a lot of new and smaller-scale charging sites. Instead of four gas stations at the corner with 8-12 pumps each, every store in every strip mall on that corner will have 1 or 2 charging stands each.

Part of me suspects this is why we're seeing an industry-wide attempt to make convenience marts less terrible (i. e. food you'd willingly buy). If you can no longer guarantee traffic from people fueling their vehicles, you have to raise the bar.

>I'm still not sure what Tesla gain from opening up SuperCharger for competitors.

When there's a gold rush, you sell shovels and pickaxes.

Cash flow?

> I'm still not sure what Tesla gain from opening up SuperCharger for competitors.

1) government funding to the tune of billions of dollars to build more superchargers

2) lucrative opportunity to sell more kWh at their super premium price point

3) further establish their leadership by forcing everyone else to follow them

Tesla can become the de facto charging station for all EVs which at a 100% markup on each kWh sold is a substantially higher margin than selling vehicles. Think of how profitable the oil companies with gas stations are. Tesla SuperChargers are miles better than the competition. If people are already going to buy and EV from the legacy automaker because of design or brand loyalty, etc. Tesla might as well make recurring revenue on selling them the energy to charge.

Yes, on the margin some people might prefer to buy a non-Tesla car if they know they can use the supercharger network, but the positive experience of the Tesla charger will influence more people to buy a Tesla vehicle.

The only downside is if there are queues at the superchargers because too many non-Teslas are charging too slowly…

But then, as others have said, it just creates an incentive for Tesla to build more chargers and capture more charging infrastructure market share.

+1 to all that. Having experimented both with non-Tesla chargers and non-Tesla EVs, the Supercharger experience is just head and shoulders better. With a Tesla, plug in and go; with a non-Tesla at a Supercharger, select the bay from the app, plug in and go.

But with non-Tesla chargers, half the time they're down or fully occupied because there's one or two stalls, not 4-96 like Superchargers. If you find a free one, you need to download some dinky app and validate your account and punch in your credit card details and then it fails half the time anyway. Gar!

Your experience mirrors mine. On a recent trip to the UK we rented a Tesla Model 3 and the Supercharging experience was a breeze; no trouble at all. However, there was not a Supercharger near the hotel so I had to use another vendor and the experience was terrible. Not only did I have to download yet another app, I had to pre-load the account with money. That was even before having to find the charger, activate it, make sure it worked, change to the other one when it didn't work, etc.

The whole experience was horrible and helped me understand why some people don't think electric cars will ever take off. In fact, I think that the non-Supercharging experience is so bad that it is actively harming EV adoption. So, the sooner that Supercharging can be adopted the better.

NOTE: NACS is a charging standard and not limited to Tesla Superchargers. My hope is that when other companies (ChargePoint, EVAmerica, etc.) adopt the standard and start providing NACS charging locations they won't screw it up as badly as they have with CCS.

Electronics-wise there's little difference with NACS. I promise they'll find a way to fuck it up.

Sincerely, non-Tesla EV owner

The standard works on the other side as well. A Toyota with a NACS plug can charge on the supercharger network, but also other networks that are also adopting the NACS standard. A non-Tesla car that charges on a non-Tesla network doesn’t generate any obvious revenue for Tesla, unless there are licensing fees. We have not seen the agreements, but I have to assume Tesla gets something.

And Tesla’s ability to do enormous markups only works if they have monopoly pricing power. Perhaps the superchargers, by virtue of being first, will sit at the prime locations, giving Tesla some serious pricing advantages. Or maybe Tesla chargers will be better maintained and overall easier to use, so Tesla may have additional pricing advantages.

But that would fall short of full monopoly-level pricing power, and we see that people have the ability to respond to differentials in fuel prices by driving to cheaper stations. This will be easier in cars that integrate charging prices into navigation.

One thing I would like to know is: will Tesla allow their cars to charge on non-Tesla NACS chargers?

But if more chargers support NACS then Tesla cars can charge at more places. A rising tide lifts all boats. Tesla, as an exclusively electric car company, will only benefit from an increase in EV infrastructure usability.

The US government was going to phase out the subsidies from Tesla and their charging network unless they switched to the new open standard. Cheaper and better for them to just get their installed connectors made into the standard.

I dont buy Tesla because of too few variants in look

I dont buy other EVs because of poor charging speed and poor charging network

I will buy a luxury EV in 2025 because of this and look forward to using the existing supercharging network or expanded supercharging station via standard

Aside from the sweet sweet revenue, this feels like a preemptive regulation dodge. I don't think we as a society should allow closed charging networks. Imagine if the legacy car manufacturers could run gas stations that would turn away cars from other manufacturers. What a waste of space.

Tesla benefits in the short term because they already incorporate the charging technology which puts them ahead in the industry. In the long term, the entire industry benefits. This too is good for Tesla as it's a market leader and benefits if the industry grows. They have a strong incentive to continue to compete to gain market share as the pie gets bigger. This is also good for customers.

An EV without a charging network is worthless, so I'm sure that a good charging narrative is important to a potential customer. But, it doesn't stop there. Teslas make very impressive cars and have innovated not just the drive train but how the car is made. For example, the cars do incredibly well in safety tests.

Some form of charging standard was coming. Tesla had two options: (1) push for NACS to be that standard, or (2) allow another standard to come into play.

(2) would have been a terrible outcome for Tesla - all the money invested in existing stations, all existing cars, would have the "wrong" standard.