Charging: How Tesla will stay profitable, even without top-selling EVs

Tesla's onto something that should see it remain hugely profitable as new and traditional car brands gradually eat into its dominant electric vehicle market share.

Morgan Stanley analyst Adam Jonas (via Electrek [↗]) estimated that its Supercharging network could be valued at more than AU$147 billion (US$100 billion) at a price of AU$49 (US$33) per share.

The global-reaching fast public charging infrastructure launched in 2012 and has been lauded for its reliability, wide availability overseas, seamless ‘plug and charge’ and navigation integration with Tesla models, and imposes queue-cutting idling fees.

While the reliable and widespread Tesla Supercharger network has been a key selling point for buying a Tesla vehicle, it has started opening select locations to all EV models, albeit at a markup.

The company has also hinted at rolling out a slower AC charging network “everywhere vehicles are typically parked throughout the day”.

4

Tesla connector: The new American standard

Additionally, Tesla is now benefiting from a growing number of rival car brands adopting its proprietary North American Charging Standard (NACS).

Ford, General Motors, and Rivian have announced plans to feature or swap their EV models to the NACS port type, along with charging station manufacturers, such as Brisbane-born Tritium, ABB and SK Signet, to offer the plug.

While Tesla’s connector has been open source since late 2022, it will benefit from more EV models being able to charge at its extensive Supercharging network in North America – without the need for it to fit costly ‘Magic Dock’ adapters to accommodate Type 1 Combined Charging System (CCS1) vehicles.

Tesla’s NACS connector has been praised for its compact design, which packs both AC and DC connections into one port.

However, it’s unlikely to be the standard in Australia as the company already uses the Type 2/CCS2 European port in the Model 3 sedan and Model Y SUV locally.

4

The carbon cash

Importantly, Tesla continues to reap on selling carbon credits to other automakers to offset their Scope 1, 2 and 3 emissions – and meet regulations overseas.

According to CarbonCredits.com [↗], Tesla sold AU$2.6 billion (US$1.78 billion) carbon credits in 2022 compared to just AU$617 million (US$419 million) in 2018. That represents a nearly 80 per cent increase – and is a major revenue source for the EV maker.

4

Tesla has more credits to sell due to its EV popularity globally, lower manufacturing carbon footprint, and sells renewable energy infrastructure for homes and businesses such as its Powerwall battery storage system.

The American carmaker is also diversifying its EV portfolio to the commercial sector – with Tesla electric bus, van, and light trucks in the pipeline.

It's also earning from current owner’s Premium Connectivity monthly subscription and one-off Enhanced Autopilot and ‘Full Self-Driving Capability’ software upgrades.