Tesla Motors, Inc.
) popped 8.8% to $224.61 on Jun 16 after reports that the
automakers is expected to collaborate with two of its biggest
Nissan Motor Co. Ltd.
) and BMW for developing its charging technology. If such an
agreement is inked, the automakers will jointly build and maintain
charging networks which can be accessed by their users.
Tesla, BMW and Nissan collectively represent a significant 80% of
the electric vehicle market. However, there are few charging
stations for BMW i3 compared with the number of Superchargers and
charging stations for Nissan Leaf. Moreover, Nissan's charging
station is not highly reliable.
Expansion of the Supercharger coverage should interest more buyers
in electric vehicles. At present, Tesla has about 97 Superchargers
spread across the U.S., 20 in Europe and 3 in Asia. The company has
recently opened a Supercharger network in China and plans to open
more than 200 all over the world including Japan.
This collaboration is expected to drive electric car sales. Tesla
will also stand to gain if this move boosts the development of
electric cars as an increase in popularity of such cars will
automatically lead to development of charging infrastructure, which
in turn should increase its sales. Moreover, increased production
of electric cars will raise the demand for lithium ion batteries,
which is a positive for Tesla, as it is planning to become the
world's largest manufacturer of lithium ion battery packs by 2020.
Tesla was planning to form a Supercharger-related partnership with
BMW. Tesla said that the auto manufacturer sharing Tesla's patents
must subscribe to Tesla's business model related to the
Superchargers and must contribute to the maintenance and running
costs of the same.
Automakers generally cooperate on sharing technologies, engine
design and platform sharing. Charging technology cooperation will
benefit everyone. However, these three automakers use different
Nissan and BMW both use 50 kilowatt direct current methods. This
procedure charges 80% of the battery within 30 minutes. Nissan uses
the Japanese CHAdeMO quick charge connector, while BMW uses
German-derived Combined Quick Charge Standard.
Tesla uses its own proprietary DC quick charge standard known as
Supercharging, which can recharge up to 135 kilowatts. It recharges
the 85 kilowatt-hour battery pack of Model S by 80% in 40 minutes.
The difference mainly lies in range provided by the charge. Nissan
Leaf travels 60 miles and BMW i3 travel 80 miles on a 30 minutes
charge while Model S travels 170 miles on a charge for a similar
amount of time.
In addition, this collaboration will support Nissan in developing
the planned longer-range LEAF electric hatchback which is expected
to be launched in 2016. Moreover, Tesla's charging technology will
enable Nissan to develop longer range 150 to 200 mile vehicles.
Recently, Tesla announced that it will be sharing many of its
patents with its rivals in an attempt to facilitate the transition
of the automobile market to environment-friendly electric vehicles.
At present, Tesla produces electric systems for
Toyota Motor Corporation
). This open sharing of patents will further enhance Tesla's
collaboration with other automakers.
Tesla currently carries a Zacks Rank #4 (Sell).
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