73385603 - seaside, ca - may 29, 2016: white tesla model x with falcon wing doors open charging at supercharger station
As once-small startups expand into global giants, many begin to take new forms. For instance, Facebook — once looked at as a social network and tech company — is now seen by many as a media company. Starbucks sells billions of cups of coffee every year, but says it is in the “people business,” while Uber looks to be more a “transportation” company than a simple “ride-hailing service.” As Tesla (TSLA) continues to grow, will the same rules apply?
Most people know Tesla as a carmaker — the company behind the first mainstream luxury electric vehicle. The company that is at the forefront of self-driving car technology. The company with extravagant Apple-like launch events. But Tesla is more than that. A notable feature is Tesla’s infrastructure and, in particular, its wide-ranging network of charging stations — which may account for as much as 40% of the US’ total, according to the Morgan Stanley analyst Adam Jonas.
Jonas says, “Tesla finished 2018 with around 12k superchargers and more than 21k destination chargers globally,” but growth is “far slower than the growth in Tesla’s car population, which we estimate increased by 83% last year.” Though Tesla is a leader in charging infrastructure, the analyst is concerned that the supply of charges isn’t keeping up with demand. Nevertheless, he forecasts the supercharger network to “expand to 15,000 stations (with 135k charging outlets) by 2030 to support a Tesla on-the-road fleet size approaching 13 million units.”
Speaking more generally, Jonas says, “part of the strategic attraction to Tesla is its physical infrastructure footprint, which we believe, over time, can improve the customer experience, reduce friction points, and support the fleet management of many millions of Tesla vehicles on the road and in both captive and 3rd party commercial fleets.” This includes charging stations, physical store and service center locations.
Perhaps something else for investors to think about is Tesla’s long-term plan on the charging stations. Right now, Tesla’s stations cater to Tesla vehicles (though there are some hacks for a non-Tesla car to be supplied energy). But if one day the carmaker decides to offer energy services to non-Tesla vehicles — which are expected to grow substantially over the next decade — Tesla could open up a new and significant revenue route, and even be looked at as an “energy” company as much as a “vehicle manufacturer.”
Jonas maintains ‘equal-weight’ rating on the stock with $283 price target, which suggest that any positive aspects of the company are already reflected in the stock price. (To watch Jonas’ track record, click here)
All in all, Wall Street is split about Tesla. TipRanks analysis of 21 analyst ratings shows a consensus Hold rating, with eight analysts Buying and Selling, and five analysts recommending Hold. The average price target stands at $326.05, representing an 8% rise from yesterday’s closing price. (See TSLA’s price targets and analyst ratings on TipRanks)