Tesla Supercharger Network Expanding

A blog about business and economics.
May 30 2013 2:43 PM

Tesla Prepares Massive Expansion of Supercharger Network

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Japanese reporters stand next to a chassis of U.S. electric vehicle-maker Tesla Motors' premium electric Model S sedan during a press preview in Tokyo on Aug. 30, 2012.

Photo by Kazuhiro Nogi/AFP/GettyImages

My key theme in writing about Tesla has been network effects. The more people who own a Tesla, the broader the network of superchargers Tesla can support. And the more superchargers there are, the more valuable a Tesla car can become. And the company's leadership seems to be very much aware of this dynamic. They followed up their first-ever profit by getting out of hock to the federal government and launching a secondary stock offering to raise more money. Now they're going to put that money to use on a dramatic expansion of their supercharger network.

Here's how it looks now:

Tesla 1
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Basically just California with some nominal functionality in the Northeast Corridor.

But here's what they say will be done over the summer:

Tesla 2

That allows for intercity travel between most of America's major city-pairs.

And here's what they're promising by the end of the year:

tesla 3

At that point you can do real road-tripping along either coast and throughout most of the Midwest. This gets you the vast majority of the potential market for such an expensive car. Then they say it'll take another full year to have the country essentially fully covered by superchargers, and then they plan to spend 2015 filling in the network.

It's a very ambitious program, but given the network effects involved, it's an appropriately ambitious program. For the foreseeable future, a Tesla is simply going to cost much too much money for the typical family to consider buying one. But the luxury car business is a perfectly legitimate business that lots of firms play in. And what Telsa has here is a road map for becoming a full-fledged player in that space. By almost all accounts, the Model S is a pleasure to drive, and if the refueling issue can really be addressed this aggressively, then they're prepared to go head to head against Mercedes and BMW and the rest. Meanwhile, using these luxury cars to build out the charging network means that down the road if more affordable EVs come to market, they won't face the same acute chicken-and-egg problem.

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