Tesla's Supercharging Network is worth what? Morgan Stanley: $100 billion!

Following two veteran car giants, Ford and General Motors, several companies that operate the largest electric vehicle (EV) charging station networks in North America and Europe, such as ChargePoint and Rivian, which was once considered a rival to Tesla, have recently embraced Tesla's North American charging standard (NACS). Tesla's charging network is increasingly sought after by the automotive industry, and Wall Street is actively estimating how much value the charging network can bring to Tesla.

According to data from the US Department of Energy, Tesla's charging stations account for about 60% of the total number of available fast chargers in the United States. Tesla categorizes charging station-related revenue under the "Services and Other Revenue" item in its financial report, rather than listing it separately. In the first quarter of this year, services and other revenue accounted for less than 10% of Tesla's total revenue.

Piper Sandler analyst estimated earlier this month that, due to Tesla's opening of the charging network, non-Tesla car owners may bring Tesla operating revenue of $3 billion by 2030, and this type of revenue will increase to about $5.4 billion by 2032.

Morgan Stanley analyst Adam Jonas subsequently attempted to value Tesla's supercharging network as a whole. Taking into account variables including EV penetration and after-tax net operating profit, he estimated the value under various assumptions and concluded that if Tesla began producing and storing its own solar energy to power its chargers, the value of the entire charging network could be as high as $100 billion.

What is the concept of $100 billion? The valuation of Tesla's supercharging network alone is higher than that of many mainstream automakers. For example, the market value of BMW listed in Germany on Wednesday was less than 73 billion euros, and the market value of Hyundai in Korea was less than $35 billion.

Tesla's stock price fell during Wednesday's trading, with the US stock market falling more than 5%, but it is still expected to have a market value of more than $810 billion at the close. The valuation of the supercharging network accounts for one-eighth of the current total market value.

However, Wall Street News noted that Adam Jonas has long been the most optimistic analyst on Wall Street for Tesla, and many other analysts are not as optimistic as he is.

Moreover, Jonas values the potential of applying artificial intelligence (AI) more when evaluating Tesla's recent stock price surge. He said: "We believe that the market hopes to first believe that Tesla is an AI brand, and then a car company."

Wall Street News mentioned earlier this week that Dan Ives, an analyst at Wedbush Securities, believes that Tesla is in the "AWS moment". Like Amazon did in the past, it launched a more eye-catching and high-profit cloud service AWS and integrated all its businesses, which widely attracted investors and boosted the stock price.

However, some analysts believe that this analogy is essentially inaccurate. Tesla does have some side businesses in charging and other areas, but in the foreseeable future, there seems to be nothing that can form economies of scale like Tesla's cars and give birth to another cash cow.

Last year, Tesla's total revenue exceeded $81.4 billion. If Piper Sandler's analyst estimates are correct, charging will increase Tesla's revenue by $3 billion in six years, which is indeed a drop in the bucket in total revenue.

The above article points out that when analyzing this popular stock, the market often regards those futuristic technologies that are far away and like science fiction as more important than the fundamentals, which is also the main reason for the market's diverse predictions about Tesla. The second-quarter results to be released next month may bring the market back to the fundamentals.