TMC predicts oil companies will need to spend $320 Billion to expand their gasoline station network to compete with Tesla home charging!
You may have read a series of headlines recently about Tesla allegedly needing to raise $8 billion in order to expand its Supercharger network for it to match gas station coverage.
Those reports are rooted in a misunderstanding of the charging habits of electric vehicle owners.
The news articles were based on a report by UBS analyst Colin Langan. The analyst is bearish on Tesla stock and recommends to sell it with a price target of $160.
Among the reasons he is not bullish on Tesla’s potential, Langan says that Tesla will need a lot of money to expand its Supercharger network to compete with the availability of gas stations. He wrote in a note published last week:
“The UBS Evidence Lab estimated that the average drive time to the nearest TSLA Supercharger is 31 minutes vs. the average drive time to the nearest gas station of only 4 minutes,”
UBS is apparently serious about this and dedicated manpower to calculate how many more Superchargers it would take for Tesla to bring the network to parity with gas stations.
Langan’s team estimates that Tesla would need to add up to 30,000 Superchargers.
What those highly paid analysts missed is that Tesla doesn’t need to compete with gas stations for availability. Not even close.
For gas-powered cars, gas stations are the only places where drivers can fuel their cars, but that’s obviously not the same for electric vehicles. The vast majority of EV owners can charge at home – just like they charge their phone.
Public charging stations, like Tesla Superchargers, are mainly for long-distance travel. Tesla owners can go months without ever visiting a Supercharger. Gas-powered car drivers can’t say the same about gas stations.
It’s not to say that Tesla doesn’t need to expand the network. The company is doubling the number of Superchargers in North America alone this year. There are currently 347 Supercharger stations in the US and 823 stations globally. Tesla will have to expand the network with the size of its fleet, which could prove difficult with the upcoming Model 3, but the comparison to gas stations is truly a useless one.
I’ll leave the last word to TMC member Bgarret who came up with a brilliant Onion-like post highlighting the stupidity of the argument:
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