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Teslaverse #2: What Tesla wins of NACS — Cybertruck spotted — Model 3 Highland

Caution! High Voltage! ⚡

Author

Jaan Juurikas
June 15, 2023

Hey, Jaan here.

Welcome to the Teslaverse.

This is a special monthly newsletter edition of the EV Universe, focused solely on the leader of the EV industry

There is so much going on with the company that I couldn’t possibly fit most of the news in our regular newsletters. The Teslaverse spun out of our collaboration with the startup Beast — a fully contactless Tesla rental, actively battling the bias of vehicle ownership.

And although Beast is a minute-based Tesla rental, they’ve just launched Beast+, mid-term rentals that allow you to drive a Tesla for the duration that suits you best, whether it’s 1 month, 6 months, or even longer. (link)

I like their policy of no hidden extras, even charging is included.

2,800 words on Tesla await. Shall we?

DEEP DIVE: The NACS benefits for Tesla?

I sent you a report yesterday as I went down the rabbit hole of Tesla’s NACS and the floodgates that have opened with the industry's adoption. Find the deep dive and the newsletter here.

What I didn’t cover too much there, is the massive benefits and potential minor problems of this for Tesla itself.

Before we go off, I’ll make a note here considering our global readership, that we are talking solely about the North American market in the NACS case. CCS1 and Tesla’s now-called-NACS standard are not present in Europe or China and likely won’t be for a long time (or at all). The CCS2 used here in Europe ≠ CCS1 of the US.

Musk did say they tried to get the EU to consider the Tesla standard (link):

“We tried very hard to get EU to consider the Tesla (now NACS) design, as it is fundamentally better in every way for consumers, but the transport minister said “a committee decided the standard years ago” (sigh).”

Elon Musk

Tesla launched the competing NACS, or North American Charging Standard, connector to the world on November 11th, 2022. (link) It has no moving parts, is half the size, and is twice as powerful as the CCS1 connectors used by the rest of the industry.

Used by the rest of the industry…

…until now.

Although the partnerships have been in the works for a while now (Farley of Ford says “few years”), the plans from automakers and charging equipment makers remained stealthy enough so it came as a surprise to nearly everyone around.

Now, most charger makers scrambled to get their news out about adopting NACS so they too could be a part of the PR wave.

Here are some of the companies I’ve gathered that have announced the adoption of Tesla’s NACS so far:

magnificent graphics by yours truly. shareable on Twitter here

Tesla+GM+Ford, all of which will be having the NACS port in the car like Teslas do now, already make up >80% of all EV sales in the US last year. If I were to combine the sales of the chargers of the companies above… I’d guess the market share represented is even larger.

By the way, Stellantis also has now given a comment and said it is “evaluating” NACS (link). No doubt every journalist and their mom are bugging automakers about this.

From larger charger makers, perhaps most notably SK is missing here with their Signet charger, aka the one used in a lot of Electrify America stations. EA is the second-largest charging network in the US, so it kind of figures.

Currently, the spotlight is on those companies adopting NACS, like they are the key beneficiaries of this move. And sure, they will level up their game significantly, considering the dominance of Tesla in the number of Superchargers, in their reliability, and in the actual cars charging there.

Just a reminder: Tesla’s Supercharging network in the US is larger than all the others combined (link):

Tesla just celebrated 2,000 locations live in North America, delivering up to 500M miles per month (link)

But what’s in it for Tesla?

After all, Musk said Tesla is supplying the adapter & other hardware to car companies at zero profit. Here’s what I think:

The CPO play. Tesla becomes a Charging Network Operator and earns the 0.xx$ per every kWh delivered. Piper Sandler analysts estimate the added revenue will be $3B by 2030.

The brand play. The non-Tesla drivers that will be surrounded by Teslas while charging will inevitably see and start comparing their own EVs to Teslas. Think word-of-mouth marketing, but also through massive exposure to the product.

The Tesla app play. This will mostly be a benefit of the Magic Dock aka the built-in NACS→CCS adapter on the Superchargers to make the charging stations public. The drivers need to download the Tesla app to charge their vehicles. What a beautiful spot to educate them on Tesla’s products or nudge them toward buying one.

The increased utilization. Tesla owners have, for the most part, enjoyed the freedom of huge Supercharging Network expansion, while the Tesla sales are still in the process of ramping up to match it. Depends on the location, of course. This means that Tesla hasn’t been able to, but increasingly will now, be able to actually get more used to the assets they’ve deployed around US and Canada.

More locations. Increased utilization and revenue mean this side of the business model works better. Great time to hit the accelerator on expansion. It now has users for its yet-to-be-deployed locations, even without Tesla itself ramping up production. And heck - Tesla owners will be happy about the new locations too.

The second-order effects. By deploying in more locations, Tesla can also boost other parts of its energy ecosystem, like increasing the battery storage deployed alongside the chargers, further winning from unit economics on building those chargers.

Tesla owners will be happy about charging networks adopting NACS. No more messing with adapters. Perhaps more successful charging sessions (?).

The downsides?

Tesla owners might not be happy. I know of plenty that are anxious already. I also know plenty that laugh, because Tesla takes up so much of the US' EV fleet anyway, so Ford and GM won’t make a difference.

Of course, we saw it coming with Tesla opening the network in Europe where Tesla has a smaller market share (and didn’t really change much still, yet) and in anticipation of the non-Tesla charging via Magic Docks. For owners, there’s a win of more locations (hard to notice the reason for Tesla owners) yet a lose of potential lines to charge (very easy to notice the reason for Tesla owners).

NACS average reliability will seemingly drop. Tesla Superchargers have 99.95% uptime, so that’s where the NACS average is right now. But connect it to all those different chargers… if the charger is down, so is the connector. Although connectors themselves aren’t ‘measured’ in reliability, it’s the image of it that counts here. Tesla itself, of course, will remain the superior network.

How profitable is Supercharging for Tesla?

In April last year, Musk said they aim for “30% gross margin or ~10% profitability, all costs included”.

However, I wonder if the opening of NACS standard, opening the chargers to public, and the NEVI funding are all present in these calculations?

From the Shareholder Meeting last month we saw how Tesla Supercharger hardware and installation costs compare to the competitors across some markets (link to deck, page 97):

And, perhaps even more notable, is the per-kWh cost of a Supercharger (not including the energy costs). The whole installation, operation, and amortization cost of the Tesla Supercharger comes down to $0.12 per kWh delivered.

This prompted me to go and try to calculate the real profits for Tesla supercharging across the countries. Will report back once I crunch through.

Tesla took one of the hardest jobs upon itself early on — building a reliable and widespread fast-charging network. Nobody wanted to do it. Now, the whole industry and EV adoption benefits from this. I love the win-win-wins.

THE COMPANY & VEHICLES

Tesla held its Annual Shareholder Meeting on May 16th. Watch the livestream here (1h50min) or the supercut here (18min). And here are the 169 slides. I highly recommend the latter for some great images.

Perhaps most notable takeaways: Musk committed to trying advertising to reach more people. And not one, but two new ~$25k next-gen vehicles are being developed.

Tesla canceled the right-hand drive Model S and X globally. (link)

Musk met the Mongolian Prime Minister virtually, for a potential use of copper and rare earth elements in EV and battery production for industrial-scale mining. (link, video)

Tesla (and Panasonic) are set to receive about $1.8B in the IRA production tax credits this year and could receive up to $41B by 2032, per data from Benchmark Mineral Intelligence. (link)

“No one can join Tesla, even as a contractor, until you receive my email approval.”

Elon Musk, wants to approve every single new hire personally

A video of a Model 3 seat with perforations and a fan underneath circulating seems to hint that ventilated seats are coming with the Project Highland (the Model 3 refresh) (video).

They might, however, be just air-cooled instead of AC-cooled like on S/X. The upgrades are rumored to include ambient lighting and an upgraded sound system too.

Meanwhile, the Model 3 Project Highland vehicles under some camo have been spotted in California last week. New headlights and HW 4 cameras confirmed. (photos)

Model S Plaid with track pack sets a new record for production EV at Nürburgring with 7:25.231, beating the record holder Porsche Taycan Turbo S by 8.119s (video 7min).

Tesla also finally released the Model S Plaid Track Package for $15k (Carbon Ceramic Brake Kit) or $20k (adding Zero-G wheels), and sold it out over the same weekend. The Track Pack unlocks the car’s top speed to 200 mph (322 km/h) (link). Intro video to track pack: (2min)

Tesla engineers took the Cybertruck in a full wrap through an In-N-Out in California (video) (link). Musk says “it’s a tradition.”

Tesla has reportedly also recently shared its production targets and prototype timing with its suppliers. (link)

Internally, this program is called Project Everest. From the looks of it, the deliveries (to employees and Tesla insiders) by the end of Q3 2023 are still likely. As per the internal timeline, the first release candidates for the Cybertruck, which are near-final vehicle versions, are slated for August 2023.

Tesla reportedly revealed a plan of building 375k units of Cybertrucks annually, likely reaching this sometime around next year. There’s also this great analysis from Carl at Munro Live on the leaked images of the Cybertruck interior (17min video)

THE TECH

A highly-detailed overview of Tesla's heat pump system, in a great step-by-step presentation of Dr. Kelly of Weber State University (1h12min video). You know, in case you planned an hour of heat pump content in your day.

First tests show that the Made-in-Berlin Tesla Model Ys that are now using BYD blade battery cells over CATL's Kirin cells have a significantly better charging curve (link).

Tesla has put up 10 Advanced Driver-Assistance System (ADAS) Test Operator job postings across Europe. (link) Not a direct link as it also applies to Autopilot, but perhaps it means the FSD Beta testing is coming closer to Europe. The same job posting in Canada predated the FSD Beta rollout in the country by one year.

Also, different 3rd party Tesla analytics providers have noticed FSD Beta updates being downloaded on various markets in Europe and Australia (link), most likely referencing employee cars that are actively testing the features outside the US.

Musk also reiterated last week that Tesla is “happy to license Autopilot/FSD or other Tesla technology.” (link)

The OTA software update 2023.20 for Teslas:

  • will let you preview all nine of Tesla’s cameras (video), instead of only the cabin camera previously;

  • see how many miles it’s been since your last tire service (manually resetting it yourself after service);

  • the car will only show drivers’ climate settings on the display if no one sitting in the passenger seat.

THE SALES

In case you missed it, Tesla Model Y became the best-selling car in the world, of any fuel type, in the first quarter of 2023. (link)

All Tesla Model 3 trims are now eligible for the $7.5k IRA tax credits. (link) That means the Model 3 now starts at $32,740 (and MY at $39,990). In California, this would put the Model 3 at a lower price than a Toyota Camry. In several states, you’ll be able to get the car for less than $30k.

Tesla has started some discount campaigns in the UK, like offering a free Wall Connector to anyone who buys a Model 3/Y at a test drive event in the UK, or a cash-for-clunkers (aka scrappage) program, where trading in a ≤£2,000 fossil car can get you up to £4k off a Model 3 or Y. (link)

Meanwhile, can’t say that the demand for Tesla has dropped in the UK… the Model Y was the 9th best-selling vehicle of any fuel type in May and is 7th best-selling to date. (link)

Model Y also became the third best-selling car of any type in May in Australia, and becoming the best-selling SUV overtaking the Toyota RAV4 (link).

PRODUCTION & SUPERCHARGING

Musk reportedly said yesterday Tesla doesn’t expect to begin producing the Semi in larger volumes until the end of 2024 due to battery supply constraints (link).

Panasonic will reportedly increase its current Giga Nevada (2170 cell) battery production by 10% over the next two years. (link).

Last month, Tesla broke ground at the $365M lithium refinery in Corpus Christi. Tesla plans to produce enough battery-grade lithium at the new factory to support the production of 1M EVs per year. Here's the live broadcast of the ceremony (video, starts at 17:38) and photos (link).

Per the Canadian government website, Tesla will open up to 750 Superchargers for non-Tesla vehicles in Canada by the end of 2025. (link)

Did you know you could host a Tesla Supercharger? (link) Tesla manages the construction and operation of Superchargers at your site, nothing extra required.

The TSLA Stock

As of writing this on early June 14th, the $TSLA is now on its longest winning streak in the stock's history, having closed “in the green” for 13 consecutive days.

The stock is up 55.52% within the past month (and +61% since our last Teslaverse on May 3rd), and as of 13th of June closed at $258.71 per share. This puts it at a $810.66 billion market cap.

The short-sellers reportedly lost $6.1B within the first 11 days of the run (link).

MORE TO WATCH & READ

Martin Viecha, the head of Investor Relations at Tesla, replied to my tweet on the silly hybrid-pushing document that Toyota sends to its dealerships. (link) “How is this a real document?” he added. Viecha has been quite active on Twitter recently to bust some old myths on ICE vs BEV.

Tesla also brought a Model Y 3D deconstruction teaching platform to the classroom in Shanghai Uni (link)

EVENTS: the largest community-organized Tesla event, the Tesla Takeover, will take place in San Luis Obispo, California, on July 29&30th. (link)

“You could be gaming in Tesla Arcade right now. Start your self-serve demo drive now", is what a little ad by the door of the Buc-ee’s store says. There’s a 12-stall Supercharger stall next to the store, and seems there really is a self-serve demo option to test out the Tesla. (link)

Tesla China launched the first “Giga Lab”, a gigafactory-themed Tesla store (link). People can walk in and experience the magic of "building a car in 45 seconds".

By the way, the official Tesla Asia Twitter account keeps posting magnificent images, a lot more than the regular.

I hope you enjoyed our second Teslaverse! This newsletter went out to 3,173 subscribers. You'll find me in your inbox again with the regular EV Universe on Friday.

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Oh, and huge thanks to the team at Beast for helping make this newsletter happen.

See you soon!

Jaan

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