Analysts are conducting assessments to determine the value of Tesla’s Supercharger network, particularly as the NACS connector becomes the standard in North America, potentially reinforcing Tesla’s position in the charging industry. A prominent Tesla analyst, Adam Jonas of Morgan Stanley, believes that the network could be worth more than $100 billion.
The Supercharger network, which remains the only global fast-charging network for electric vehicles (EVs), holds a significant advantage in North America due to its extensive coverage and reliable infrastructure. Initially, Tesla developed the network as a service for its own vehicle owners, without aiming for profitability. However, the company anticipated the emergence of a robust EV charging industry.
Despite Tesla’s expectations, such a widespread charging infrastructure has yet to materialize in North America. As a result, automakers like GM and Ford have started adopting Tesla’s NACS connector to provide their EV customers with access to the Supercharger network. This move could potentially grant Tesla a substantial share of the EV charging business, particularly in North America.
Adam Jonas and his team at Morgan Stanley attempted to estimate the value that this charging business could contribute to Tesla. They envisioned a long-term scenario where Tesla generates and stores its own solar electricity to power its Superchargers. Based on this assumption, they developed several scenarios using different projected percentages of US miles driven by electric vehicles in 2030, Supercharger market shares, an average efficiency of 4 miles per kilowatt-hour (kWh), and a revenue estimate of $0.32 per kWh.
These scenarios were then subjected to a valuation process, applying a 20X multiple to the net operating profit after tax (NOPAT) for fiscal year 2030, which was discounted at a weighted average cost of capital (WACC) of 9.0%.
According to the calculations provided by Seeking Alpha, the potential valuations for Tesla’s Supercharger network under different scenarios are as follows:
- The “reasonable case” suggests a 10% penetration of EV miles, with Tesla holding a 50% share of Supercharging and a 30% NOPAT margin, resulting in a potential net present value of $3 per share for the business.
- The “plausible case” assumes a 20% penetration of EV miles, with Tesla capturing a 70% share of Supercharging and a 50% NOPAT margin, yielding a potential net present value of $14 per share.
- The “dominant case” envisions a 30% penetration of EV miles, with Tesla controlling an 80% share of Supercharging and a 70% NOPAT margin, leading to a potential net present value of $33 per share.
- The “monopoly case” anticipates a 50% penetration of EV miles, with Tesla securing a 100% share of Supercharging and an 80% NOPAT margin, resulting in a potential net present value of $78 per share.
Considering Tesla’s over 3 billion shares outstanding, the Supercharger network could be valued at over $100 billion if the price per share reaches $33.
