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TBF, being good at running an EV charging business could be a profitable niche for the long term.

by rjsw 1y ago

originalvichy 1y ago
That problem is solved, but unfortunately the bottleneck has been for the longest time the larger, more complex electrical equipment that is used to connect chargers to the grid. Companies like the Finland-based Kempower produce the best charging equipment on the market, but their problems start where their equipment ends: the grid.
amelius 1y ago
Niche? Strange choice of word for something that is becoming mainstream.
- mbreese 1y ago
  I read that as “niche for Tesla”. It’s not what their primary product was supposed to be. But, with more EVs being compatible, it might end up being the most stable part of the company. It’s not as sexy as cars, robots, or robotaxis, but it should be consistently profitable.
notahacker 1y ago
I know people in the sector who made a lot of money from very quickly from installing charging equipment when it was a novelty. They think it's a race to the bottom now, and I don't think it's going get more profitable, certainly not Tesla-valuation level profitable
ishtanbul 1y ago
I've looked at this space from an infrastructure investment perspective. Its really tough, and generally not considered "infrastructure" by most infra folks because of the lack of long term revenue contracts. There is not a great way to underwrite the risk of utilization of the chargers. The customers need to show up. Unless you can guarantee some of the revenue, you have a lot of capex with no clear path to repay it. The chargers also require a lot of maintenance and the grid connection is challenging with low consumption and high peak load, and long wait to get connected... Investors have been staying away.
- Zigurd 1y ago
  Gas stations are a tough business, too. But they've had a century to develop a working business model. A charging station is different enough that the business has entered the race to the bottom before they figured out how to adapt the gas station business model profitably.
nunez 1y ago
how so? aren't all of the other charging businesses operating at huge losses?
Zigurd 1y ago
Let's stipulate the Tesla has done the best job of building a network of chargers that actually works. On that basis, Tesla could spin it off as the highest valued charging network in existence. The problem is that charging revenue provides Tesla an astronomical contribution to the share price, with Tesla's current price to earnings ratio. It would only make sense to sell it if Tesla were pressed for cash. Instead Tesla has more cash than they've felt like deploying to, for example, update their product line. No need to pile more on top of that.
xnx 1y ago
Tough to compete with the free "gas station" most EV owners have in their garage.

TBF, being good at running an EV charging business could be a profitable niche for the long term.

by rjsw 1y ago

TBF, being good at running an EV charging business could be a profitable niche for the long term.

That problem is solved, but unfortunately the bottleneck has been for the longest time the larger, more complex electrical equipment that is used to connect chargers to the grid. Companies like the Finland-based Kempower produce the best charging equipment on the market, but their problems start where their equipment ends: the grid.

amelius 1y ago

Niche? Strange choice of word for something that is becoming mainstream.

mbreese 1y ago
I read that as “niche for Tesla”. It’s not what their primary product was supposed to be. But, with more EVs being compatible, it might end up being the most stable part of the company. It’s not as sexy as cars, robots, or robotaxis, but it should be consistently profitable.

notahacker 1y ago

I know people in the sector who made a lot of money from very quickly from installing charging equipment when it was a novelty. They think it's a race to the bottom now, and I don't think it's going get more profitable, certainly not Tesla-valuation level profitable

ishtanbul 1y ago

I've looked at this space from an infrastructure investment perspective. Its really tough, and generally not considered "infrastructure" by most infra folks because of the lack of long term revenue contracts. There is not a great way to underwrite the risk of utilization of the chargers. The customers need to show up. Unless you can guarantee some of the revenue, you have a lot of capex with no clear path to repay it. The chargers also require a lot of maintenance and the grid connection is challenging with low consumption and high peak load, and long wait to get connected... Investors have been staying away.

Zigurd 1y ago
Gas stations are a tough business, too. But they've had a century to develop a working business model. A charging station is different enough that the business has entered the race to the bottom before they figured out how to adapt the gas station business model profitably.

nunez 1y ago

how so? aren't all of the other charging businesses operating at huge losses?

Zigurd 1y ago

Let's stipulate the Tesla has done the best job of building a network of chargers that actually works. On that basis, Tesla could spin it off as the highest valued charging network in existence. The problem is that charging revenue provides Tesla an astronomical contribution to the share price, with Tesla's current price to earnings ratio. It would only make sense to sell it if Tesla were pressed for cash. Instead Tesla has more cash than they've felt like deploying to, for example, update their product line. No need to pile more on top of that.

xnx 1y ago

Tough to compete with the free "gas station" most EV owners have in their garage.