Making sense of Tesla's Supercharger, autonomous strategies

Tesla (TSLA) CEO Elon Musk has big plans to expand the EV maker's Supercharger network by investing over $500 million into the project, according to a recent post on X. The irony lies in the fact that Tesla laid off a bulk of its Supercharger development team at the end of April.

Gartner Vice President and Team Manager of Automotives, Transportation, and Cross Manufacturing Mike Ramsey sits down with Catalysts to discuss Tesla's charging network strategy, calling the layoffs a "cost optimization effort as they try to get their operations in line"

"But, the investment in the network actually makes a lot of sense, and might be a real benefit to them in the long term as a new source of revenue," Ramsey tells Yahoo Finance.

Ramsey goes on to comment on Tesla's full self-driving capabilities in its vehicles; Tesla's Autopilot function is currently undergoing a probe by Department of Justice (DOJ) officials.

"What they're charging customers for is a partially automated system that is more like a convenience feature. It is not a self-driving vehicle, like something that Waymo is offering in the southeast United States and in San Francisco," Ramsey states. "So when Tesla talks about this service improving and rolling out, they are not really playing in the same field as many of the, I would say, fully autonomous robocab-type providers are playing. That said, their system keeps getting better and better and they can make money selling it because it's a nice feature and that people like to have, and... Tesla has promised that in August they're going to unveil their new robocab that can... essentially be a full self-driving vehicle. My expectation is that vehicle will not be the same thing that you and I can buy..."

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Luke Carberry Mogan.

Video transcript

Tesla, Ceo Elon Musk posting on X saying Tesla will spend over $500 million expanding the supercharger network to create thousands of new chargers this year.

This comes after the electric vehicle maker laid off the employees who ran the ev charging team to break down.

What's next for Tesla?

We have Mike Ramsey Garner, automotive analyst, Mike, thank you so much for joining us this morning.

Listen, we got great news to talk to you about so plenty to dive into.

I mean, talk to me about this.

You turn from Elon Musk, what do you make of it?

But I mean, actually, to be honest with you, this announcement makes more sense than the layoffs do.

Um The supercharger network has been one of the most important assets that Tesla's had in terms of differentiating it between the other automakers and why buy a Tesla and they just spent the last year essentially getting all of the other automakers in the United States to switch over to the type of charging plug that they use.

And by doing that, they actually open up that network to become a significant source of new revenue.

So the layoffs maybe that is a uh you know, cost optimization effort as they try to, to get their operations in line.

But the investment in the network actually makes a lot of sense um and might be a real benefit to them in the long term as a new source of revenue.

How long does something like this do you think take to build out what is the timeline look like?

Given?

Obviously, they clearly have experience, but they're almost starting from scratch in a sense.

Yeah, there's a, there are a lot of things that go into it.

Obviously, you need to work with utilities um to make sure that there's enough high power connection to these sites.

And uh you also have to uh get the real estate that is in the right place.

So, I mean, to build out $500 million worth of infrastructure is probably a good solid couple of years of, of work, but they do know what they're doing and, and I promise you that they've already done the real estate scouting for almost every spot in the United States at least uh to find the best locations for superchargers.

Well, this announcement from Tesla coming after BP was very excited to try and pick up some of the EV charging real estate in the US left behind by Tesla after those layoffs.

Does BP stand a chance here.

Yeah.

Listen, I mean, I it's, it's not exactly like the um, liquid fuel refueling market, but especially at the beginning, it was very different.

But as we mature and these superchargers meaning like really fast chargers, they are a lot closer to that market.

I do think that there's gonna be more parallels and just like there's more than one oil company and there's more than one set of retailers.

Um Once everybody starts using the same plug, then there's, there's room for everyone to compete in this market.

Let's talk about one of the other uh big question marks that's hanging over the heads of a lot of investors in Tesla.

It has to do with their automated driving, their full self driving.

And Elon Musk was out earlier this week last night saying that he is actually saying that the cyber truck full self driving is only a few months way.

How realistic do you think that timeline is and, and just give us your sense just of where Tesla stands within this race in uh full uh driving here and self driving here and, and what exactly that ultimately means here for the space at large?

Yeah, it's really important too.

And I, I think this is very hard for people to, to get their head around because Tesla's autopilot and their full self driving software works pretty well.

And to most of us, we think you get behind the wheel and it can do a lot of automated functions.

You think this is a self driving vehicle, it's not.

Ok.

This what they are charging for, what they're charging customers for is a uh partially automated system that is more like a convenience feature.

It is not a self driving vehicle, like something that Waymo is offering in uh the Southeast United States and in San Francisco.

So when Tesla talks about this service improving and rolling out, they are not really playing in the same field, as many of the I would say, fully autonomous Robocop type providers are playing.

That said their system keeps getting better and better and they can make money selling it because it's a nice feature and that people like to have.

Um and they promised Tesla has promised that uh in August, they're gonna unveil their new Robocop uh that couldn't, you know, essentially be a full self driving vehicle.

My expectation is that vehicle will not be the same thing that you and I can buy or even the cyber truck, full self driving.

This will be a vehicle that has a lot more equipment on it, more computers, more sensors, things that are not part of a standard Tesla self driving vehicle.