Gas stations are horrible businesses. You can have a single customer drive away without paying and it will wipe out the entire profit for selling gas that day. They have to get people inside buying food, groceries, drinks, etc. It’s the only way they stay afloat. This new charging network will have similar issues.
It’s not enough to put your chargers NEAR other businesses, like a restaurant, because then the client’s money goes to THAT business, not yours. And you’re stuck with the low margin selling of electrons. Do what the gas stations do, partner with McDonalds and take a cut of their profit on your site.
I can’t see how this is true. In order to charge EVs at level 3 DCFC rates, 62.5 to 250kW, you would need a HUGE number of solar panels and a HUGE number of batteries. I doubt that could ever be profitable. Heck, it’s not even feasible due to the large amount of area needed for it. Maybe on roads in middle of nowhere, like in the desert, where acreage is very inexpensive.
On the other hand, solar energy is perfect for charging EVs at level 2 rates, 5kW-11.5kW. On average, you would need 7 to 11 solar panels to do that. That would work really well at home, or at an office parking lot. Cover the parking lot with panels, have 10 or 20 chargers underneath, and people plug their car in to charge for a few hours each day.
I know this was true 20+ years ago, but I don’t think it is true today, except at some VERY old filling stations. Today, the only way to make the pump turn on is to have a payment method set before you start pumping. Either you insert your card (and it puts a $100 hold on it immediately to check if it is a valid card with credit available), or you go inside and hand the clerk your card, or you have the clerk 50 bucks and they set that pump to pump 50 bucks worth of gasoline.
This is absolutely true. The vast majority of their margin comes from selling ancillary items such as beverages, snacks, car items, and other sundry stuff. They only make a few cents per gallon of gasoline, let’s say if they are lucky, a 4-5% gross margin (net margin is much lower). But on beverages, they make 50-80% margin. On charging cables, they make 80+% margin. Etc.
“Dumb criminal” sidebar. Michigan driver’s licenses have a magnetic strip on the back, just like a credit card. Some crooked sorts discovered that putting a driver’s license in the pump, will turn it on, as if it was a credit card, so they fill up and take off. What they did not realize was that the pump recorded all their personal information off of the license, so the police would swing by their home, and put the clinks on them.
He might be aiming for that - but whether Tesla hits those levels is a separate matter. Those returns might not really be within their control, since the economic return for an off-grid charger (nearly all costs are upfront capital costs, very low operating costs) will be largely determined by interest rates. On-grid chargers will have more operating costs (presumably they’re reselling electricity from the utility), but lower cap costs.
Like EV’s themselves, the charging market is still very immature. It will be interesting to see how it shapes up. Again, unlike gas stations, chargers have to compete with home fill-ups and free fill-ups at work and some destinations - so they’re going to have some constraints in how much of the market they can serve, and at what price.
The really big wildcard may be regulatory - whether local governments (looking mostly at California) end up requiring large numbers of non-residential parking spaces to be actually built out with chargers. AIUI, CA requires 10% of such spaces be “EV capable” (meaning the building electrical panel has to be able to support the load and be connected by conduit for future installation), but not necessarily equipped with chargers. If that changes to require a certain amount of chargers to be installed, it could have a significant impact on the economics of for-profit charging stations.
This seems unlikely. The storage to be able to “fill up” a number of cars during the “high rate” period would be tens of thousands of dollars, probably even more, costing more than the entire rest of the infrastructure. And you couldn’t site enough solar panels to make it worthwhile, given the number of electrons you need to collect and shovel out during the “high rate” time.
Much easier to just take whatever the rate is at the time, plus it up, and have the charger calculate the charge. Trying to make margin during a 3 or 4 hour window by installing a large, expensive storage facility with enough capacity would seem a fool’s errand.
And I have become convinced by a previous post that “along the way” gas stations such as we are used to will be a diminishing breed except in certain circumstances (interstates, for example.) Better to place them near a business which can waste your time while you waste your time. I wonder how long before we see that as a significant trend? (I know it already exists to a smallish degree: hotels, etc. but when we see McDonald’s or others get in the game in a corporate way I’ll know it’s for real.)
Tesla has a history of surprising people. Tesla has rolled out a mobile supercharger based on a Megapack that can charge about 200 vehicles off grid. Additional power is available with the addition of solar panels. Seems plausible (to me at least) that this solar/storage solution can be adapted to charging stations to reduce grid usage during the expensive power times. I think the only limitation now is that Tesla has so much other demand for its battery packs that deployment to its charging stations is a lower priority.
The Megapack is a large battery storage system that can store up to 3.9 MWh of energy. If we assume that most vehicles will charge between 20 to 80 percent, which is around 50 kWh per vehicle, then a single Megapack 2XL will be able to charge close to 200 vehicles before needing to recharge. This is before adding the solar panels, which will provide additional power to the system.
Odd then that Electrify America, a charging network funded by VW, has been using Tesla batteries for storage since 2019 and has recently up their game to the mega level. Electrify America is also field testing solar.
I like Tesla overall, but I don’t think they can change the laws of physics/etc.
Sure. But they also can’t change the laws of math. A MegaPack has 3.9MWh of storage. If you charge 200 cars with that, that’s 19.5kWh per car. That’s about 70 miles for a model 3, and about 60 miles for a model Y.
That’s aside from the fact that it usually doesn’t make sense to deplete one battery just to replenish another one. That wears out two batteries instead of just one. Sometimes it makes sense, if you can time shift cheap electricity into expensive electricity, but usually it doesn’t make sense.
If you run the numbers, you will see that the number of solar panels needed would be very large.
They do. I agree. They also have a history of over-promising. So it’s a mixed bag and betting for Tesla is about as good as betting against them.
How long have I been promised full self driving? Robo taxis? Cyber Truck on big delay. Semi roll-out is sluggish at best (have they even shipped more than 20 yet?). No word on Roaster 2.0 yet. The $25k car is still just a dream.
Agreed Musk has done a lot. But he has no idea how to manage expectations nor how to deliver on-time.
Yes, it is. Let’s try using the previous number of 19.5 kwh per car, which is at best about 80 miles of range in a model 3/Y. It happens that I have 12 panels on my roof and on the best summer days I get about 19 or 20 kwh. (My panels face west, so I’d get 22 or 23 if they were more optimally orientated.
Let’s assume a simple 12 stall charging site and it serves one customer every 30 minutes for 10 hours per day for 10 of its stations. That is 200 customers and you’d need 2400 panels for them…in the summer. (More like 4x that many in the winter)
2400 panels, each being 300w and 40" x 66" would be about 44,000 sq ft…almost an acre and about 75% of a football field (including end zones and sidelines) and that is only using 5/6th of the stalls for 10 hours per day on clear summer days.
The idea that the economy can run exclusively on wind and solar any time soon is ridiculous. A mix of everything available, renewables, fusion, fossil, hydro, geothermal, whatever, is the most likely outcome. Net zero CO2 is a pipe dream.
I suppose that depends in part on what percentage of the power one tries to get from solar. While peak requirements may be way beyond what solar can provide, that doesn’t mean that one couldn’t reduce the demand on the grid significantly.
That’s obviously not enough panels to supply all the chargers. But they’re not going to be entirely running on solar, and will have grid connections. They’ll just get some of their power from solar. Though some of the time the panels will be enough to meet all the needs of the cars charging - for example, most of the stalls are empty in this photo…
Sorry, didn’t mean to suggest Tesla solar charging stations would be completely off the grid, only that solar/storage would reduce grid use enough to allow >10% profitability.
But to be clear, only a fraction of the electricity needed at charging stations comes from on site solar. The question is whether it is enough to significantly improve profit margins. The fact that Tesla and other charging companies are continuing to add solar panels to many of their stations suggests that it can.
Sure. But It is more than just a promise. Tesla is already using solar and storage in a subset of its charging stations.
Tesla charging stations are powered by a combination of on-site solar power, grid power, and/or battery storage. The specific type of power used depends on the location of the station and the local availability of renewable energy sources. How are Tesla Charging Stations Powered
Look, Tesla has thousands of charging stations worldwide and are constantly adding more. They also have industry leading profit margins. They probably aren’t losing money on the stations. I’ve read that Tesla on average charges about $0.25 per kWh at superchargers, while average electric residential retail cost is about $0.23/kWh. So if solar+storage can substantially reduce that retail cost there is the potential for decent profit margins.
No doubt, but it is probably a small subset based on what I’ve seen. I think I’ve charged at 2 or 3 with solar panels in CA. On my recent trip to Glacier and back I charged at a SC 20 times (about 15 unique stations) and none had solar or batteries that I could see. Not even the very new one in Fernley NV east of the gigafactory. (Pro tip: always stop here because the cost per kwh is about half price)
I think that $0.25/kwh is old news. Except for the Fernley location, the lowest cost I saw was $0.33.
Most likely the best that might happen is solar built as shade, which the math tells us is about 25x less than the amount I calculated for 20 cars per stall per day to each get 20 kwh, peak summer. So this is on the order of about a 4% margin improvement minus capital costs of the solar equipment. But then you have to add back in something for lower peak grid usage.
I’ve charged at a few in CA too. Most locations I’ve been to don’t have solar panels or battery storage. The new location in Mariposa, CA has solar panels. Didn’t notice any battery storage, but there might be.
One thing you’re leaving out of your calculations is how many customers are charging for free. My road trip car is always my 2017 Model S because free supercharging is a wonderful thing. Although, yes, I know I just paid for it up front in the price of the car.
Not really. I was just approximating the total daily kwh that would be consumed compared to the total kwh that would generated (peak summer) You’d have to have an on site big battery to smooth out the actual demand for 250 kw charging.
So back to what I see as the main point: Is a 10% profit margin for Tesla charging stations plausible.
Given that Tesla is charging more than the mean residential rate for electricity and the capacity to use battery storage to purchase energy from the grid during the cheapest times, I think profitability is likely and a 10% profit margin plausible. Whatever the contributions of solar might be only adds to that margin.
The use of batteries in charging stations indicates that the OEM consortium plan to build their own charging network will very likely benefit the Tesla battery storage business.
There’s no way to know. It depends on the capital costs and whatever their internal cost of capital is.
A device like a Supercharger has virtually no operating costs (other than the cost of the electrons it resells, some payment processing costs, and maintenance expenses). But it has a land cost, a non-trivial fixed installation cost, and it will depreciate at some rate to the end of its useful life. At near-zero interest rates, this is kind of an easy thing to make profitable - but at current rates, you have to make more profit to cover your cost of capital.
So regardless of how much Tesla might make in gross operating profit on a charge (probably a few dollars per fifteen-minute “fill-up”), the profitability question hinges on the land cost, installation cost, and Tesla’s cost of capital.
