Tesla’s Technological Infrastructure: A Potential New Revenue Stream
Legacy automakers Ford and GM recently announced that drivers of their electric vehicles will soon be able to use Tesla Supercharger stations, potentially drawing customers away from Tesla. However, Wedbush Securities analyst Dan Ives sees a larger opportunity at play – Tesla selling access to its infrastructure and technologies to outside companies. Ives likens this to Amazon Web Services (AWS), which began as an internal cloud computing platform for Amazon and transformed into a highly profitable business by selling access to its infrastructure to outside companies. Ives believes that Tesla is similarly positioned to offer access to its own battery technology in the future.
The Potential of a New AWS-Like Business Model for Tesla
Tesla, like Amazon, has created a technological infrastructure for internal use that can be leveraged by others. On CNBC, Ives said, “It’s starting with Superchargers and, ultimately, I think the next step could be battery technology. I think that’s the golden goose right now is that they’ve built the castle [and are] waiting for others to call.” The recent partnerships with GM and Ford to grant access to Tesla Superchargers are just the beginning.
Tesla aspires to be helpful to other companies and is enabling non-Tesla owners to use the Supercharger network. The company is even willing to license Autopilot/FSD (full self-driving) and other technology to others. Ives sees Tesla’s partnerships with Ford and GM as early adopters of the company’s plan to grant access to its technology. In a Piper Sandler research note, it was estimated that Tesla could earn upwards of $3 billion in charging revenue from non-Tesla owners by 2030 and $5.4 billion by 2032.
Revenue Generated and Federal Incentives to Expand the Charging Network
Services revenue generated from selling access to its Supercharger network and battery technology could be a potential billion-dollar business for Tesla. Piper Sandler estimated that revenue generated from non-Tesla drivers could reach as high as $5.4 billion by 2032. This revenue, along with federal incentives, would be used by Tesla to expand its charging network.
Tesla’s stock is up 126% year-to-date, helping CEO Elon Musk reclaim his title as the world’s richest person. Ives believes that investors are beginning to recognize the potential of Tesla’s technological infrastructure, seeing the sum-of-the-parts thesis starting to play out.
The Need for GM and Ford to Drive Broader EV Adoption
Ives suggests that for the overall adoption of electric vehicles, Tesla needs other automakers to succeed. Although access to Superchargers may encourage some customers who would have gone with a Tesla to buy from GM and Ford instead, Ives believes that Tesla views this as beneficial for the broader goal of EV adoption in the U.S.
If Tesla follows the AWS model, selling access to its technologies, the company’s potential revenue stream could increase significantly. Tesla could make billions partnering for its Supercharger network and technology offering, which may prompt other technology giants to follow suit. Piper Sandler predicts revenue upwards of $5.4 billion from non-Tesla EV charging by 2032, which would help the company scale its charging infrastructure and bolster electric vehicle adoption.