Future Supercharging and Megacharging Profits

Tesla and its competitors will need to have If Tesla makes 20 of those Megapack factories it will cost $8 billion in Capex for initial construction and Tesla would be making about $400-500 billion per year in revenue from those factories around 2030. This will scale to $1 trillion per year by 2040. However, if…
Future Supercharging and Megacharging Profits

Tesla and its competitors will need to have If Tesla makes 20 of those Megapack factories it will cost $8 billion in Capex for initial construction and Tesla would be making about $400-500 billion per year in revenue from those factories around 2030. This will scale to $1 trillion per year by 2040.

However, if a large portion of the Megapacks produced are kept by Tesla for its own charging network. Then Tesla will be making about $400,000 per year from the charging revenue, with about 6-8 years of payback after tax incentives. 100k per year of Megacharging would be about $40 billion of recurring revenue.

1.5 billion electric cars and 40 million electric Semi trucks will need 4000 kWh per car per year and 100,000 kWh per truck per year of electricity. This totals up to about 10 TWh/year. The cars and robotaxi will need to be charged for charging when they away from residential charging. There could be about 5 TWh/year for the future electric charging network that replaces gas stations. If this is $0.10 per kWh in profit for electricity sales then this would be $500 billion per year in global charging profit and $1-1.5 trillion in revenue if the electricity is sold at $0.20 or $0.30 per kWh.

Currently, Tesla is at 4.2 electric cars on the road and there are about 30 million EVs on the roads. Ford adds another 300k electric cars to Tesla’s charging network. By the end of this year, Tesla will have about 6 million EVs in its charging network and 12-15 million by the end of 2024 (this depends upon how many EVs Tesla makes and how many other car companies join the Tesla charging network.

Building out the Semi trucks, Cybertrucks at scale will massively increase the demand and usage of megacharging stations. By the end of 2026, there should be about 100 million EVs on the roads and about 20-25 million Tesla’s. There should be about 150,000-300,000 Tesla Semis on the roads and 500,000 to 700,000 Cybertrucks. There should be about 50,000 Megapacks at Megacharging stations. Tesla would be charging ten to 15 times more miles than today, if Tesla gets most of the other EVs charging at Tesla charging stations.

Profitability (Part 2): The Investor Day deck tells us the daily kWh per post (for 2023 we infer a minor increase consistent with prior years). That, multiplied by the number of installed posts in Part 1, provides us – close enough – the total kWh sold that Quarter. pic.twitter.com/PdIYE6SE3s

— Larry Goldberg (@TeslaLarry) May 28, 2023

Profitability (Part 3): Using a notional price of $0.36 per kWh (“free charging” is presumably a marketing expense), and a notional cost of electricity of $.16 per kWh (used throughout this study) gives us – close enough – revenue and gross margin contribution for each year: pic.twitter.com/BLR4YXzlLb

— Larry Goldberg (@TeslaLarry) May 28, 2023

Profitability (Part 5): ROI (Capital efficiency Part 2)


We already know from the Investor Day deck that installation costs run at below $45k per post (See Capital Efficiency above). Now we can do an estimate of total capital investment vs gross margin earned. Hint: it’a amazing! pic.twitter.com/SZxd6GHPdu

— Larry Goldberg (@TeslaLarry) May 28, 2023

Huge Upside Potential (Part 1): There were about 26 million EVs on the road in ’22, growing exponentially. Tesla is currently serving about 4.5m in its SC network, earning $.6b; Tesla has learned to scale both in size and utilization while reducing wait times to nominal levels. pic.twitter.com/q2PCqXOf62

— Larry Goldberg (@TeslaLarry) May 28, 2023

If Tesla builds at 400 Posts per week, then Tesla can add 20,000 Supercharging station posts. Globally, Tesla can add a lot more charging in Asia and Europe.

Ford Factor (Part 5): In the last week alone, Tesla announced 30 new SC Stations in operation, with almost 400 Posts. The implementation of new Stations are occurring at industrial speed, and these will soon be equipped with V4 Superchargers.

— Larry Goldberg (@TeslaLarry) May 28, 2023

Each Megapack provides 3.9 MWh of storage and Tesla sells them for $2.6 million each. However, the Megapacks only cost Tesla about $1.3 million each. Tesla will build out Megacharging stations with many Megapacks and lots of solar for generation. The electric grid cannot handle all of the charging for all of the electric semi truck, cybertrucks and all EVs. The world uses about 25% of oil for cars and trucks. If we convert those over time then we will need about 20-30% more electricity as we convert for gasoline and diesel to mostly solar and batteries.

The Megapacks will be charging trucks at a rate of 1-3 Megawatts per hour. The megapacks will be charged with solar, wind or grid energy and then will be discharged by charging electric trucks and cars. If there was two megawatt of solar power per megapack at each location, then each Megapack on a fully sunny day could get fully charged once per day off of local solar power and possibly once more if there was available grid power overnight. If we assume one full charge and discharge every day, and $0.30 per kWH as the price. This would be $1170 per day per Megapack. The 2 megawatts of solar power would be extra capital cost. The cost of solar farms is about 1 million per megawatt. This would be $4 million for Tesla per complete Megapack charging. There are 30-50% tax incentives. This is for each megapack 2 MW of solar and charging station and land improvement. This would be about $427000 per year.

If there was no solar power onsite, and there was wholesale pricing of $0.10 per kWh, then the $2 million for each Megapack of a Megacharger station would have to pay $143000 per year for 3900 kWh per day and make $284000 if the charging electricity was sold for $0.30 per kWh.

By 2025, Tesla will have the Lathrop and Shanghai Megapack factories fully ramped and they will be making 20,000 Megapacks per year. Tesla will build about 1 to 2 Lathrop sized Megapack factories each year from 2025 onwards. If Tesla were using 10,000 Megapacks each year for a global truck charging network then they would be growing megacharging and supercharging by about $4 billion per year. If Tesla is selling 50,000 Semi trucks per year as is the goal for 2024, then 10,000 Megapacks per year will be needed for charging those trucks. If Tesla scales beyond 50,000 semi trucks per year to 500,000 Semi trucks by 2028-2029, then the Megapack demand will be about 100,000 Megapacks per year.

This would use a lot of capex. This would be about $200-400 billion per year. The charging would be a lot of recurring annual revenue. 250,000 Megapacks would be a TWh/year of charging.

Unlike Megapack sales to a utility, Tesla would be getting tax credits in the year that the Megacharging station is completed and then it will take 5-10 years for the return on investment just from charging revenue. Tesla would also make money on food and service sales just like gas stations and truck stops today.

China is expected to add 95 to 120 gigawatts (GW) of solar power in 2023. China added 87 GW of new solar power into operation in 2022 making the total installed capacity to 392.6 GW at the end of 2022. China probably already added 30-40 GW in 2023 to bring its total installed solar to 420 GW and 520 GW at the end of 2023. The world installed 268 GW of new solar capacity in 2022, with annual installations expected to hit 315-350 GW in 2023.

Global installed solar generation capacity reached about 1.1 TW in 2022. Total global wind power capacity is up to 837 GW at the end of 2022 with 78 GW added in 2022. This is one fifteenth of Tesla projection of a final total of 30 TW of solar and wind. There should be about 6-8 TW of solar and wind by 2030 and 16-18 TW of solar and wind by 2040.

We are adding solar at about half of where Tesla expects the world to plateau at adding 610 GW/year of solar and 402 GW/year of wind.

Tesla projects the world will need 2.3 TWh per year of megapack fixed storage or 60 Lathrop-sized megapack factories. The world needs about 6 Megapack fixed storage factories to supply the conversion of the global electrical grid. We will need these six Megapack for grid factories by 2028-2032.

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