Color me skeptical

Looks like battery swap is coming to an end

In summary, opening the Supercharger network to become a key EV infrastructure provider results in many tailwinds that far exceed the negatives Tesla is playing the long-game as they always have

5) Tesla benefits from US IRA tax credits to fund the network build out. I also wouldn’t be surprised if Ford, GM, etc. are helping fund some of the build out as part of their agreements Today, Tesla already has distinct cost advantages in building out a charging network

While Teslas lose unique network access, I think the experience will still be more beneficial for Tesla customers (higher peak charge rates, access to more stalls, lower prices, and/or seamless GPS & payment experience) Also, charging isn't the only differentiator for Tesla cars

4b) As a result, Ford & other OEMs may begin outsourcing OS, autopilot, and/or vehicle/battery manufacturing to Tesla in the future I continue to believe the electric, connected, autonomous vehicle transition is too difficult for legacy OEMs to successfully handle in-house

4a) I think this is the first step towards other B2B partnerships with automakers In addition to charging, Ford CEO Jim Farley has been very candid about Tesla’s advantages in software, manufacturing, and other areas

3) Free advertising for non-Tesla customers as they’re exposed to Tesla technology & users (word of mouth) Many will see Tesla as the leader & most advanced car & want to try the cars themselves, which has proven to stimulate demand

2c) Similar to Android OS, Tesla recognizes they’ll never have majority market share for hardware (cars) so might as well monetize the rest of the industry This will also be important for heavy duty charging for the Tesla Semi if/when that is outsourced to other Class 6-8 EVs

2a) This is a large & sticky (less cyclical) revenue opportunity that diversifies Tesla’s business model While it’s not accurate to compare this to owning every gas station because EVs mostly charge at home, the opportunity is still in the tens of billions per year before 2030

2b) Charging likely a more consolidated market than gas stations, allowing Tesla to capture more market share & pricing power Tesla more vertically integrated via energy generation, storage, & distribution than the O&G > gas station process, so unit economics are more favorable

1b) This puts competition from legacy OEMs in a tough spot because they’re trying to milk their ICE business as long as possible. Accelerated EV adoption hurts competition until they reach critical EV scale, which won't happen for many years See my pinned tweet for more on this

1a) Achieves Tesla's mission of accelerating EV adoption by removing primary consumer hurdle (poor charging infrastructure) Today, Tesla is at a disadvantage because most buyers won’t consider *any* EV today & EVs are still <7% of new US car sales. A rising tide lifts all boats

1/ Tesla opening its Supercharger network is controversial Teslas lose unique access to the network, which impacts demand. Also, since EVs mostly charge at home, the market is smaller than gas stations With that said, the tailwinds are overlooked & Tesla will benefit long-term

I see 5 benefits (listed in order, each of which I'll elaborate on): 1) EV adoption is accelerated 2) Ancillary revenue w/ attractive unit economics 3) Free advertising to non-Tesla owners 4) First step in other B2B partnerships 5) Low cost for network buildout

Like dominos. The shift away from CCS can’t be understated

Not great

Adoption of NACS means CCS charging is in trouble in North America $CHPT $EVGO and Electrify America (owned by VW) severely impacted given US exposure

Lol the list of Tesla customers keeps growing and already includes Apple, Ford, GM, PG&E, and Hertz Don’t invest based on emotions

GM now also adapting Tesla’s charging standards. As I’ve said, every OEM will need to follow to stay competitive The market is quickly realizing how massive Tesla’s B2B opportunities are. I think charging is just the first example of tech that Tesla will sell/license to others

7/ June 2023 Legacy OEMs have no experience writing code or developing software They outsource the software to 150+ different companies, all of which are siloed and own their own IP, which makes the integration near impossible

5/ February 2023 Farley says that traditional automakers can't compete with Tesla on EV production and costs This was shortly after Ford reported -41% margins on EVs in FY22

6/ May 2023 Farley says Tesla has the only reliable charging network. Ford can't pursue this because they're 10 years behind & it's too expensive As a result, Ford is adopting Teslas charging standards in their vehicles. Other OEMs will need to follow to stay competitive

4/ February 2022 Farley says that Ford can't compete with Tesla on talent, EV production expertise, or distribution. Ford's distribution costs alone are $3-4k higher than Tesla's