Why do I continue to be bullish on Tesla? "Thirteen".

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The future Tesla is a company that integrates vertical manufacturing and software/hardware, energy production and charging network, and travel technology.

In the previous article, we analyzed what factors could support Tesla’s manufacturing sector to achieve long-term steady growth and maintain competitiveness. Now, let’s continue to discuss Tesla’s self-built supercharging replenishment network and intelligent/automatic driving sector.

Let’s first take a look at the actual data.

Tesla’s self-built supercharging network is currently the largest, most stable, and highest power replenishment network in the world. So far, Tesla has more than 30,000 supercharging connections worldwide, with the vast majority of them having a power of 120 kW, a portion being 250 kW, and a small part being 300 kW+.

Currently, there are 7,000 supercharging connections in mainland China. In the next two years, Tesla plans to double the number of supercharging connections in China to 21,000, with a power of 250 kW+ for the newly built supercharging connections.

Recently, many regions have hoped that Tesla could open up its supercharging connections to other brands of electric vehicles. Elon Musk also repeatedly stated that Tesla’s supercharging network can be completely opened up to all electric vehicles.

Buffett once said that he likes companies with moats. And a moat refers to a threshold that others cannot enter or that is difficult to enter once a company has established some kind of advantage, such as Coca-Cola’s unique taste and brand, Apple’s software/hardware integration and product family, or the network effect often mentioned in the Internet industry.

When consumers choose electric vehicles, the number one consideration is the length of the range and the convenience of charging. Therefore, many people believe that Tesla’s opening up of its supercharging network is not “smart” enough because it will significantly weaken its “moat”.

I do not agree with this view. I believe that it is not a weakening, but an enhancement of the so-called “moat”. This is a bit counterintuitive, but it is just a shift from an “explicit” moat to an “implicit” moat.

Why?

First of all, Tesla’s mission is to accelerate the world’s transition to sustainable energy. Therefore, when it has already built a network that can replenish all electric vehicles, there is no need to let other brands duplicate something that is no different. Opening up the supercharging network is actually practicing this mission, reducing the threshold for other brands to produce and sell electric vehicles, and working together to accelerate the world’s transition to sustainable energy.

However, there are some scientific laws that no one can violate.

(1) First, there is no such thing as a free lunch. Tesla’s supercharging network was built with its own money, and other manufacturers need to share part of the upfront investment to use this supercharging network. This is reasonable, isn’t it?(2) Secondly, the Tesla Supercharger network is relatively tight in some areas in the United States and a small part of China, meaning that the number of Tesla vehicles in these areas exceeds the capacity of the Supercharger stations within reasonable time. Therefore, these Supercharger stations need to prioritize meeting the needs of Tesla vehicles, with other brands of vehicles limited to certain time periods for use, or charged at a higher fee. This is relatively reasonable.

(3) Furthermore, because the Tesla Supercharger network is undoubtedly most compatible with its own battery management system, Tesla vehicles are charged at a higher power than other brands of vehicles using this Supercharger network. This is also reasonable.

In short, even if Tesla opens up the Supercharger network to other brands of vehicles, they would need to share the investment costs, limit charging to non-peak hours or charge a higher price, and the charging power cannot reach its optimal level.

For Tesla, on one hand, they can recover their investment costs in advance and use these resources to accelerate the expansion of the network in the future. On the other hand, they can increase the income of the Supercharger network during idle or busy times.

For consumers, there is definitely a question in their minds: why not buy a Tesla instead of other brand vehicles that are subject to many restrictions and higher charging costs?

Therefore, in my opinion, Tesla’s decision to open up the Supercharger network is actually transforming its weak and single “explicit” moat into a complex and resilient “implicit” one.

(to be continued)

This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.