Tesla Motors: Supercharged?

Tesla Motors (TSLA) has so many moving pieces sometimes it’s hard to know how to analyze it’s profit potential. Case in point: Tesla put out a release detailing how much it would charge for the use of its SuperChargers, something that is currently free to Tesla owners and was announced back in November. Those owners will continue to enjoy free charging for the life of their cars, as will anyone who orders a Tesla by Jan. 15. After that you’ll be paying for the service.

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Still Tesla claims that it will be providing charges at below cost, and Tesla says “it will not be a profit center” for the company. That doesn’t mean it won’t improve its profits. In fact, Global Equities Research’s Trip Chowdhry claims that by fiscal 2020, the SuperChargers will add $2.6 billion to revenue, the “majority of which will go directly into Tesla’s bottom line.” Here’s his math:

Assumption – 2020:

Average Time at supercharger = 30 min

(Estimated for 2020 – includes vehicles from 2017, 2018, 2019 and 2020) Number of Vehicles = 1,500,000

Days in a Year = 365

Average Price per minute (Average of Teir 1 and Teir 2 – across the whole country) = $0.16

Revenues to Tesla = $2.62 billion; which goes directly to the bottom line

Of course, a lot will depend on Tesla getting to 1.5 million cars on the road, up from Chowdhry’s estimated 100,000 in 2017.

Shares of Tesla Motors have gained 3.2% to $237.04 at 3:31 p.m. today.