Turns Out A Tesla Supercharger Costs 2 Or 3 Times What Elon Musk Said (NASDAQ:TSLA)

May 21, 2023

Author's Update, October 17, 2015: As it turns out, analysis firm ARK talked in May to a Tesla executive who said that the average Supercharger station costs $270,000, or 80% more than the price most frequently stated by the company. Remember that one would expect Tesla's cost per station to decline as the company acquires scale and experience.

Imagine I'm a Tesla (NASDAQ:TSLA) shareholder interested in some specific metrics - it defies belief, I know. I'm interested in this Supercharger thing, as they seem like they might be important to the company's future. After some googling, I stumble on some reassuring cost numbers:

Today, Musk said the stations cost $150,000 without solar and $300,000 if they have solar panels.

Well, that kind of seems to suggest, like, the typical cost of a Supercharger station is $150,000. After all, as of December 2014, only two of them were solar-powered, according to Tesla.

But I'm not quite sure so I do some more googling:

The supercharger station costs approximately $150,000 to build one, and approximately $300,000 to build a solar super charger station.

That's from the shareholder meeting, so I'm, uhm, inclined to think $150,000 is perhaps the right number. Anyway, let's research this a little bit more:

The cost for Tesla is between $100,000 and $175,000 depending on the station...

Given that this outlet had contact with Tesla itself, and had published documents that nobody else had published yet, and given the numbers they mention, and given the previous sites quoting Tesla and Musk and talking about the same numbers, I get the impression that a Supercharger station costs $150,000.

I'm just weird like that.

So imagine my shareholderly surprise when I open the latest 10-Q (technically speaking this factoid was already mentioned in the 2014 10-K but I didn't notice it then) and come across this statement:

As of March 31, 2015 and December 31, 2014, the net book value of our Supercharger network was $128.5 million and $107.8 million.

My mind begins crunching the figures. Isn't that a lot for $150,000? How many Superchargers are there, after all?

After some reading and Excelling I decide to write an article on Seeking Alpha, including the following chart with all dollar figures expressed in thousands:

Value per Supercharger station. Constructed by author from 2014 10-K, 2015 Q1 10-Q, Supercharge.info

Whoa. So the cost of a Supercharger was $150,000 in mid-2013, but by the end of the year, it had rocketed to $400,000! It's like, wow - it's crazy off the hook.

Then I realize that doesn't make any sense. Costs should be declining due to experience and scale, and indeed that seems to have happened in 2014 and 2015. So perhaps the cost has always been three or four hundred grand, and not the cost the company said!

But, but... perhaps Superchargers were abnormally small up to mid-2013, which is when Elon made those statements on cost? I find the info on Supercharge.info, going to the Data tab and filtering by opening date. As it turns out, the early Superchargers were if anything bigger than the current average - Tesla's own site lists 429 stations with 2,349 chargers, for a mean of 5.47 chargers per site. The early ones were all 6-8 with some having 10 chargers.

As a shareholder, I wouldn't want to believe the company is lying, so I look for explanations. Could it be that the value of an asset may be greater than its cost? Then I remember from accounting class that indeed, they will differ over time, but with PPE usually it's the other way around - you spend $10,000,000 building a factory and a year from now it's only worth $9,750,000 due to depreciation.

Anyway, I decide to check Tesla's own statements on capital spending. Apparently, 5% of capex (or $75 million for 2015) will be devoted to Superchargers. And the network will expand 50% from 333 stations at the beginning of the year. I bring out the calculator and... so... that's actually $450,000 per site.

I stare at the screen. On MarketWatch, I can see TSLA at $240 with a $30 billion market cap. I cannot, however, see its $0.8 billion equity.

I call my broker and tell him to buy some more.

This article was written by

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