A Bigger Look at Tesla goes way beyond selling cars. Understanding this as a car buyer is a plus and, I think, as an investor it could make you a lot of money.
I expect you have read about “company towns”. For example, a company might own a coal mine and create a town where the workers could rent houses. That town would have a store where you could buy groceries, a restaurant and so on. All the town was owned by the company such that they could profit from you spending your paycheck.
I am going to assert that Tesla is doing something similar but, instead of a town, it is the whole planet. With one big positive twist — Tesla won’t have to pay you so you will have money to spend with them. Let’s start with what Tesla has already done and then speculate as to the future.
Tesla Car Sales
We all know this but its efficiency over traditional car sales combines less overhead for Tesla with what many consider an easier way to buy a car. Rather than going to a dealer you can shop on-line. Not everyone will consider this more convenient but I certainly do. You just go to their web site, find what you want and place an order. When the car is ready you either go pick it up or it is delivered to you.
Tesla Charging Stations
While you can charge your Tesla at home (which you will see later might also give Tesla more money) or at a public EV charger. There are currently competing charger networks but pretty much universally you hear that the Tesla chargers are the most reliable. So, you pick Tesla. The network keeps track of you making your charging stop easier and quicker. If you don’t know where you want to charge, your car will tell you about nearby locations with additional information such as possible wait times. Offering more information doesn’t cost Tesla anything and it just increases your convenience.
Tesla charging locations are way more than just the chargers. Many also have both PV solar panels and a Tesla MegaPack attached to them. What this means that Tesla both produces some of its own power and can charge up the MegaPack during cheap electricity times and then sell it back to you at a big profit.
In addition, much like today’s gas station, a convenience store or even a restaurant may be attached so you have a way to pay Tesla more money while you are charging your car.
Just your Tesla? Nope. Tesla opened its charging connector. So far, Aptera, Ford and General Motors have decided to convert from CCS to this connector. While this will reduce the cost of the cars (the Tesla connector is way less expensive to produce) it also gets more customers to the Tesla chargers.
Tesla PV systems
Yes, Tesla sells PV systems for houses. Such systems include the PV panels themselves and a Power Wall — the battery and controller that interfaces this system to your house electrical system. Your car can, of course, be plugged into these systems adding battery capacity. Tesla software allows you to sell power to the electric utility which will make you (and Tesla) more money.
These are utility-scale battery systems. They help level out grid power consumption peaks as well as generation peaks. This makes PV solar and wind much more viable for grid connections and eliminate the need for inefficient and expensive to run fosile fuel peaker plants.
Telsa is offering auto insurance in some US states. This is another profit center for Tesla as its safe and reliable vehicles mean insurance claims on Tesla cars are lower than most others. Better insurance rates for you and profit, once again, for Tesla.
While still in beta testing this is another Tesla profit center. While it has had significant development costs it is just a software upgrade to the vehicles so once it is deployed it is almost 100% profit. It also will make Tesla cars less likely to be in an accident potentially increasing profit for Tesla Insurance.
There are also two other wins here. First, this system will make self-driving Tesla taxis possible. Unlike other self-driving taxi ideas, its use will only be restricted by legislation, not location as other systems depend essentially on a map. Second, Tesla could elect to license their technology to other car makers.
Tesla already makes some of their own batteries and are scaling up to make more. In addition, they are getting into the processing of raw materials to make these batteries.
While this hasn’t happened, it certainly could. Unlike most car manufacturers, Tesla has “money in the bank”. There are two ways they could make a profit here.
First, they could offer financing on car sales. Over 100 years ago General Motors Acceptance Corporation was formed to offer financing for General Motors cars.
It also could offer leases on Tesla cars.
So, yeah, Tesla, potentially “the company store”. It’s clearly not all bad. Stay tuned.