The Growth Of Tesla’s Most Powerful Assets

Tesla supercharger stations at Southlake, Texas. Source: Flickr

To support the goal of transitioning the world from fossil fuel to clean energy, Tesla (NASDAQ:TSLA) has been building a network of infrastructure that spans all over the world.

This network of infrastructure is made up of buildings and vehicles, including the supercharger stations, mobile service vehicles as well as stores and services locations that work tirelessly for the company.

These properties represent some of Tesla’s most important assets as they help not only to generate sales for the company but also to differentiate Tesla from its competitors.

Moreover, these assets also provide the company with a competitive advantage that is hard to replicate as it takes years as well as huge number of resources to build.

In addition, Tesla’s businesses will not work without these infrastructures or assets.

Therefore, a look at the growth of these assets will give investors an insight into the growth of Tesla’s businesses.

In this article, we will look at the numbers of these infrastructures and track the growth of these assets that primarily consist of supercharger stations, mobile service vehicles and stores and services locations.

Let’s take a look!

Tesla’s Supercharger Stations

Tesla’s supercharger stations

Average YoY Growth Rate As Of 2022 => 35%

To remove the general perception that electric vehicles are typically having limited travel distances, Tesla has built a network of charging infrastructure referred to as Supercharger stations.

These Supercharger stations are built to provide fast charging to enable long-distance travel and to encourage the broad adoption of electric vehicles.

According to Tesla, they are built with an industrial-grade high-speed charger designed specifically to recharge a Tesla electric vehicle at a significant speed faster than other charging options.

For instance, Tesla Superchargers can replenish half the battery in as little as 20 minutes. Besides, Tesla has a growing network of Destination Charging partners – including hotels, restaurants, resorts, and Airbnb locations. The use of the Supercharger network is either free or requires a small fee.

A typical Supercharger station is equipped with six to twenty electric outlets and is strategically located along well-traveled routes to allow electric vehicle owners the ability to enjoy long-distance travel with convenience and minimal stops.

When we look at the chart above, the number of Tesla’s Supercharger stations has grown dramatically in the last 6 years.

Between fiscal 2016 and 2022, Tesla has more than quadrupled the number of Supercharger stations worldwide, growing from only 700 stations in 3Q16 to nearly 4,700 stations as of 4Q22.

Tesla has been adding this important asset from quarter to quarter, suggesting that the expansion of a network of Supercharging infrastructure is crucial for the broad adoption of electric vehicles.

This unique asset is hard to replicate and requires huge upfront capital outlay.

Over the chart, we can see that the growth of Tesla’s Supercharger stations was particularly impressive between fiscal 2020 and 2022.

In 2022 alone, Tesla added more than 1,200 Supercharger Stations, beating all prior records while the number soared by 900 units in fiscal 2021.

These are the 2 best years that Tesla has ever had.

In short, the continuous growth of the supercharging infrastructure all these years suggests that Tesla’s business operation has also been growing healthily and may even be accelerating at a much faster pace in the foreseeable future.

Tesla’s Mobile Service Fleet

Tesla’s mobile service fleet numbers

Average YoY Growth Rate As Of 2022 => 62%

Tesla launched the mobile service fleet to create the best car ownership experience for its customers.

The biggest advantage of the mobile service fleet is that Tesla’s customers are not required to come to Tesla service centers to service their vehicles.

In North America alone, mobile service is now completing a substantial number of all service jobs, allowing its customers to never have to leave their homes or offices to get their cars serviced.

According to Tesla, the mobile service fleet has achieved a great deal of customer satisfaction because of its convenience and lower cost of service compared to its service centers.

Tesla will continue to increase its service capacity, especially during the period of Model 3 and Model Y ramp up.

As the chart above shows, Tesla’s mobile service fleet total has increased tremendously from only 100 vehicles in 2Q17 to nearly 1,600 vehicles as of 2022 4Q, representing an average growth rate of roughly 62% over the past 6 years.

Similarly, the growth of Tesla’s mobile service fleet has been unstoppable year over year and quarter over quarter, suggesting that this infrastructure is crucial for Tesla’s domination in the all-electric vehicle race.

While Tesla has been relentlessly growing its mobile service fleet in the past 5 years, the growth was sort of flat in fiscal 2020, as reflected by the flat curve in the chart.

However, the growth of Tesla’s mobile service fleet made a roaring comeback in 1Q 2021 when the company increased the fleet to 923 vehicles, representing a growth of 22% year on year or 12% sequentially.

Therefore, Tesla has added nearly 400 mobile service vehicles in fiscal 2021 alone, up more than 40% from 2020.

In 2022, Tesla added roughly 300 mobile service vehicles, up 24% from a year ago.

Again, the incredible growth of this valuable asset will provide Tesla with a competitive edge over its competitors as these are hard-to-replicate properties that require a huge upfront investment.

Tesla’s Stores and Service Locations Worldwide

Tesla’s new stores and service locations numbers

Average YoY Growth Rate As Of 2022 => 19%

Tesla opens its stores and service locations in highly visible, premium outlets in major metropolitan markets.

All these stores are owned and operated by Tesla.

As far as I know, there are no third-party vendors involved in Tesla sales and marketing.

The reason is that the company wants to have better control of inventory, manage warranty services and pricing, maintain and strengthen the Tesla brand, and more importantly, have faster customer feedback.

According to Tesla, opening a new store and service center in a new geographic area boost demand for its products.

Therefore, Tesla has been rapidly increasing its retail footprint by having more stores and service outlets.

In addition, Tesla combines these facilities with sales and personnel in service centers and refers to them as “Service Plus” locations.

Despite the importance of opening new stores and service locations, the average YoY growth rate has only been 20% for the last 6 years as shown in the chart above.

Tesla may have slowed down in recent years in opening new stores and service locations as the services provided by these stores can possibly overlap with the ones provided by the mobile service fleet.

Besides, maintaining new stores and service locations requires huge working capital and takes resources out of the company.

Tesla has been quite conservative in expenses and costs and has switched to online booking in recent years.

As such, the growth rate of new store openings has only been 20% on average as of 4Q22 due to the huge capital as well as the massive operating cost requirement for such a venture.

Despite the slowdown in new stores and service location openings, Tesla still operates 764 stores and service locations globally as of 2022 4Q.

For your information, Tesla managed to grow its store and service locations by a massive 19% year-over-year in 2022 Q4, a highly impressive figure.

Investor Takeaway

In conclusion, Tesla’s mobile service fleet has the highest average growth rate at around 62% whereas the new stores and services location opening growth rate averages only 19% as of 2022 Q4.

One notable explanation for the mobile Service fleet having the highest growth rate is that it probably gives a higher return on invested capital.

From a comparison perspective, Tesla’s mobile service fleet is easier to maintain and requires less capital to operate but covers a greater area compared to a store and services center which is usually fixed to a certain location.

More importantly, according to Tesla, the mobile service fleet gives better customer satisfaction in terms of flexibility and cost.

For this reason, Tesla has taken some of the physical store sales to online ordering as depicted in this article: Tesla will close most of its stores and only sell cars online, which means that Tesla will most likely further slow down the opening of physical stores and service locations in the future.

However, Tesla’s physical stores and service locations are not without their merits.

For one, Tesla’s physical stores and service locations definitely provide a better shopping experience compared to online stores.

More importantly, we are seeing substantial growth across all of Tesla’s infrastructures in fiscal 2022 and the result shows that Tesla’s growth train is still chugging healthily.

In short, despite the post-pandemic disruption and supply chain challenges, Tesla’s infrastructure still expands healthily in a post-pandemic world.

Again, Tesla’s supercharging stations, mobile service vehicles as well as stores, and service locations are all important assets that the company can’t do without.

References and Credits

1. All figures in this article were obtained and referenced from Tesla’s quarterly and annual statements which are available in Tesla Press Releases.

2. Tesla supercharger detailed info: Tesla charging infrastructure.

3. Featured images in this article are used under creative commons license and sourced from the following websites: Ed Uthman

Disclosure

The content in this article is for informational purposes only and is neither a recommendation nor a piece of financial advice to purchase a stock.

If you find the information in this article helpful, please consider sharing it on social media and also provide a link back to this article from any website so that more articles like this one can be created in the future.

Thank you for the help.

Trending Statistics For Other Companies