There are Teslas and there are EVs: Here’s how this distinction is holding the EV market back

Despite EV competition heating up over the past year, Tesla (TSLA) maintains a grip on the market. These dominant positions represent and underscore what is needed before mass adoption of electric vehicles is possible.

In the United States, Tesla amassed an astonishing nearly 70% market share of electric vehicles in 2021, as demand for electric vehicles remained hot.

This is a 9% decline from 2020, when Tesla held 79% of the market. It seems like a step in the right direction, but estimates predicted that Tesla would drop to 56% market share in 2021 as Ford’s Mustang Mach E (F) and several others hit the market.

However, people are still buying Teslas, not EVs.

While the superstar CEO with a cult following plays a role, along with cutting-edge software via Autopilot and “Full Self-Driving”, the feasibility of owning a Tesla compared to other battery-electric vehicles is second to none. .

In a FactSet report, it is noted that despite an electric vehicle market share approaching 1%, electric vehicles account for approximately 0.7% of kilometers traveled. On average, electric vehicles travel 8,000 miles per year, while traditional cars travel 11,500 miles in the United States.

When you look at this number blindly, you’d think it spells out a problem for the entire electric vehicle industry.

But, if you look at the miles driven in Teslas, you get a different story. While drivers in England may have different driving habits than in the US due to population density, access to public transport etc., Teslas are the most driven car with an average of 12 459 miles per year, during the first three years of ownership.

While the numbers aren’t directly comparable, it’s probably safe to assume that Teslas are driven closer to, or even exceed, that 11,500 mile average than internal combustion engines.

If that assumption is correct, then nearly three-quarters of the EV market could be driving more than anyone else, while the other quarter that isn’t a Tesla barely drives.

It reminded me of that WSJ opinion piece about a 2,000 mile road trip in a non-Tesla electric vehicle.

While it’s pretty unfair to title something “The Electric-Vehicle Road Test” and claim it tests the feasibility of EVs, while using an EV that isn’t representative of the market, the article does highlight the difference between a Tesla and an EV.

The grueling journey that was compounded by a lack of research highlighted the difference between the Tesla SuperCharger Network and the rest.

Fast 80% charging for electric cars is often advertised as taking between 20 and 30 minutes, but it’s nowhere near that simple because factors such as the number of people at the charging station, the update / maintenance a charger is, and even the heat of your battery, can all make a huge difference in charging speed.

That 20-30 minute runtime means you’re charging without anyone next to you, with the latest level three charger. And, at least for Teslas, that you’ve properly preconditioned (warmed up) your battery before charging.

On the non-Tesla EV road trip, the writer learned very quickly that not all fast chargers are fast. When using third-party chargers, you can go between 3 and 20 miles per minute, while the Tesla V3 SuperCharers max out at 75 miles in 5 minutes and charge rates of 1,000 miles per hour.

In a similar post, but about using a Tesla for a road trip, this family drove 41 hours and only charged for 5 hours on their 2,747 mile trip.

The difference between the two journeys couldn’t be greater for the future of the EV market. Without robust and well-maintained charging infrastructure, going all-EV for a family can only make sense for those who want and/or can afford a Tesla because it’s the only EV capable of meeting their driving needs. , without sacrificing a ton of time on the trips to the charge.

What does this mean for investors?

Without an infrastructure bill, companies like EVGO could struggle to scale, as the small portion of non-Tesla EVs already can’t support huge growth.

Plus, with profits coming almost entirely from the 30% of the market that likely generates a ton less than the remaining 70%, growth looks very limited for pure-play charging companies.

Additionally, charging companies are just beginning to encounter their public enemy no. 1, Tesla.

Back in November, Tesla launched a “Non-Tesla Supercharger Pilot” program last November that opens select Tesla SuperChargers to the public, with Musk saying they “will add the rest of the industry connector as an option to Superchargers in the U.S. “. .

Tesla has 21% of fast-charging stops and 58% of all fast-charging stalls in the United States, and, as we’ve already mentioned, it’s a well-maintained and frequently upgraded.

The interesting thing about this is that it makes you wonder if this will cause Tesla to lose some of that shine in the eyes of potential buyers. People are buying Teslas, not EVs, right now. But a feasibility boost for other EVs and some, if not many, may cancel their orders for another. That’s when we learn how much it’s about autopilot, superstar CEO, and more.

Tesla’s best-selling Model Y is sold out until at least January 2023. The trick for Tesla is to be able to maintain an outsized demand while taking advantage of the increased feasibility of its competitors.

Ultimately, automakers like Ford(F) that have electric vehicles at scale should come out on top. But the speed at which Tesla is willing to update its charging network to not be compatible with Tesla is a huge factor.

Does the plan backfire on Tesla in the long run or is Tesla successfully taking advantage of under-planned and slow market entries from traditional automakers? Either way, the charging companies are the losers.

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