Elon Musk’s Tesla Motors (NASDAQ: TSLA) is planning to double the number of filling stations for electric cars it operates in 2017.
“We started 2017 with over 5,000 Superchargers globally and by the end of this year, Tesla will double that number to total more than 10,000 Superchargers and 15,000 Destination Charging connectors around the world,” a Tesla press release states.
“In North America, we’ll increase the number of Superchargers by 150 percent, and in California alone we’ll add more than 1,000 Superchargers,” the release continued. “We’re moving full speed on site selection and many sites will soon enter construction to open in advance of the summer travel season.”
Tesla will become a Major Filling Station Operator
If these plans become reality they will make Tesla one of the largest filling station operators in the world.
It goes without saying that this might give Tesla some much needed new sources of revenue in the form of snacks, junk food, soda pop and cigarettes sold at the Superchargers. Drinks, snacks, candy, chewing gum and tobacco are the major sources of profit for U.S. filling station operators.
Another potential source of income would be to selling Tesla supercharging franchises to convenience store operators and large retailers. U.S. retail giants; Kroger (NYSE: KR), Costco Wholesale (NASDAQ: COST) and Walmart NYSE: WMT) are major filling station operators.
Will Tesla Team up with Big Retail?
Kroger alone operated 1,387 supermarket fuel centers and 784 convenience stores in 2015. Retailers like Kroger use low-cost fuel as a loss-leader to attract customer. Walmart is also planning to use convenience stores a pickup point for merchandise ordered online.
Such retail giants would be natural allies for Tesla. One intriguing possibility would be a Tesla Store inside a Walmart Supercenter, a Kroger Marketplace or a Costco or Sam’s Club membership store (Walmart owns Sam’s). That would be a perfect place to sell the Model Three and the X Series SUV to soccer moms (America’s principal auto buyers).
Tesla has already located superchargers at one large U.S. retailer; Meijer which operates supercenters in the Midwest. Walmart is already selling cars via kiosks in some of its stores and both Sam’s Club and Costco have vehicle buying programs, so the groundwork has been laid.
Electric Cars are a growth Industry
It also lays the ground work for the roll out of Tesla’s Model 3 Sedan and future vehicles such as the electric semi-truck and pickup truck Musk is tweeting about.
Another source of potential revenue is selling juice to owners of other electric vehicles such as the Volkswagen Crozz crossover expected to appear in 2020 and the 13 electric models Ford (NYSE: F) has planned for that year.
Tesla is not the only carmaker making a big gamble on filling stations for electric cars. VW has set up a subsidiary called Electrify America LLC which plans to spend $2 billion to build 200 charging stations and 300 chargers for electric vehicles. News stories indicate that other electric vehicles; including Tesla’s, will be able to use the Volkswagen filling stations.
It looks like the age of electric cars has arrived. Elon Musk might not be as crazy as some people think.