Tesla’s Charging Infrastructure Could Be Its Next Big Revenue Stream
Tesla’s infrastructure and technology could benefit long-established automakers, resulting in a lucrative revenue stream for Tesla. Analysts suggest that Tesla is just beginning to sell access to its infrastructure, and that an “AWS moment,” referring to Amazon Web Services, is upon us. Today, Tesla has infrastructure and technology that it initially developed for its own use, and that could benefit traditional automakers. Tesla being an enabling platform for competitors is obviously unique, providing unprecedented advantage and sustainable competitive edge against legacy participants, such as General Motors and Ford in the electric vehicle space. Selling access to the infrastructure that Tesla developed for itself and for its EV customers could also prove to be a brilliant business move for the company, much like it did for Amazon.
Potential revenue streams for Tesla could be significant if they keep moving forward in that direction, ranging from charging and software to battery tech. Considering Federal incentives, Tesla could expand its charging network, helping it generate revenue in the future. Piper Sandler estimates that Tesla could bring in more than $3 billion in charging revenue from non-Tesla owners by 2030 and $5.4 billion by 2032. Tesla could generate billions in charging partnerships with Ford and GM, and analysts believe the automobile company is just getting started with that kind of service revenue.
Tesla CEO Elon Musk recently tweeted that Tesla “allows other companies to use our Supercharger network” and “seeks to be as helpful as possible to other automakers.” Dan Ives, an analyst at Wedbush Securities, said that Tesla’s relationship with Ford and GM is only the first step, with the next being battery technology and opening up access to more of its technology for other automakers to use.
Additional Piece: The Race for EV Dominance Goes Beyond Vehicles
While electric vehicles are all the hype, that’s not enough to ensure dominance in the industry. With technological advancements, EVs are becoming more accessible to the masses, bringing about the increase in sales of EVs. With more automakers planning to launch their own EVs, Tesla, as the pioneer of sustainable and innovative auto technology, knows that it needs to broaden its horizons and go beyond manufacturing vehicles to achieve a competitive edge.
Tesla is already considered the world’s most valuable automaker, surpassing its traditional counterparts. The company is now focusing on increasing its supply chain and infrastructure, including expanding its charging network and software, to ensure that its customer base retains loyalty to the brand and for the future of the EV industry.
Tesla’s cars are known for their technological innovations; thus, it is only natural for the company to leverage its expertise and infrastructure positively by providing easy access to its technologies for other automakers. By doing this, Tesla can create a new revenue stream that goes beyond selling EVs, and its charging infrastructure could provide a competitive advantage in the industry’s growing market.
The future of the EV industry will depend on building a collaborative network that enhances customer experiences and inspires innovation that could shape the development of EVs. Tesla’s partnership with GM and Ford shows that the company is taking vital steps to expand beyond vehicle production and provide enabling technologies for other automakers to leverage. By providing support for other automakers’ EV ambitions, Tesla is laying the foundation for a possible future where it is at the forefront of innovation in the automotive industry.
In conclusion, Tesla’s move to expand access to its charging network and technology could lead to the next big revenue stream for the company, providing millions of dollars in service revenue annually. Moreover, this expansion helps lay the foundation for a sustainable and innovative automotive industry. As the pioneer of sustainable auto technology, Tesla’s charging infrastructure is a crucial element in the growth of the EV industry and its potential for mass adoption.
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Tesla CEO Elon Musk doesn’t seem to feel threatened by Ford and GM. In fact, he may consider them customers.
Both legacy automakers recently announced that owners of their EVs will be able to use Tesla Supercharger stations starting early next year. That could encourage some customers who would otherwise buy a Tesla to buy a Ford or GM electric vehicle instead.
But Dan Ives, an analyst at Wedbush Securities, sees something bigger at play. He believes that Tesla is just beginning to sell access to its infrastructure and technologies, and that an “AWS moment” is upon us.
AWS refers to Amazon Web Services, which is managed by a risky bet on enormous success for amazon. What is now a dominant cloud computing platform essentially began as an internal cloud that the online retailer built for itself out of necessity. Selling access to the infrastructure he developed proved to be a brilliant business move for Amazon, one that surprised the company and outsiders alike with its success – and produced then-CEO Jeff Bezos even wealthier.
Today, Tesla has infrastructure and technology that it also developed for its own use, and that could also benefit long-established automakers.
“I think that’s just the first step,” Ives said said CNBC on Friday. “It starts with superchargers and I think the next step could eventually be battery technology. I think that’s the gold piece at the moment that they built the castle [and are] I’m waiting for others to call.” Ford CEO Jim Farley and GM CEO Mary Barra made the call, he noted.
As for the possibility that access to the supercharger will help GM and Ford sell more electric vehicles, Ives said Tesla is perfectly fine with that: “I think that’s Musk needs In terms of equitable adoption in the United States, GM and Ford will actually succeed when it comes to the broader EV vision.”
This week Musk tweeted that Tesla “seeks to be as helpful as possible to other automakers” and “allows other companies to use our Supercharger network.” We are also happy to license Autopilot/FSD [full self-driving] or other Tesla technology.”
Ives said Tesla could generate billions in coming years from its charging partnerships with Ford and GM, and reckons the company is just getting started with that kind of service revenue. He called the two automakers early “ambassadors” of Tesla’s plan to provide access to its technology.
Piper Sandler Estimates suggest that Tesla could bring in more than $3 billion in charging revenue from non-Tesla owners by 2030 and $5.4 billion by 2032.
Such revenue and federal incentives will also help Tesla expand its charging network.
Tesla shares are up 126% year-to-date, which is helping Musk reclaim the title the richest person in the world.
“From batteries to superchargers to storage, the sum of the parts thesis is starting at an early stage now, I think, to be implemented with investors,” Ives said.
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https://fortune.com/2023/06/10/tesla-elon-musk-charging-gm-ford-dan-ives/
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