Why Tesla is King of EV's — and Will Be For Some Time

The Supercharger Network is hitting god-like status

At the time of writing this article, Tesla operates 2,257 Supercharger stations in the USA, with 167 stations currently under construction and 432 planned stations. Typically, each Supercharger station is equipped with a minimum of 8 charging stalls.
While Tesla has plans to open up the network to other electric vehicle manufacturers, it primarily serves Tesla vehicles. This exclusivity is a key factor in Tesla’s position as the reigning king of EVs. Their charging network is not only the most extensive but also the most reliable in the world. This advantage is crucial because range anxiety remains a significant concern for potential EV buyers. With Tesla’s infrastructure in place, you can confidently drive your Tesla anywhere without worrying about running out of charge.

Tesla touts that a supercharger can charge a 320km in 15 minutes, or charge to 80% in 30minutes.
In 2022, Tesla made a significant announcement: they would unlock their charging port for use by other manufacturers. This move represents a positive stride for the electric vehicle (EV) industry. Now, when you visit friends or family who don’t own a Tesla, you can still charge your EV at their home. The adoption of a universal charging standard worldwide will further facilitate the transition to electric vehicles for everyone. 🚗🔌

Battery Superiority

The batteries are the most important and most expensive part of an EV. Tesla has been at the battery game for 10+ years now and Tesla batteries have lasted considerably longer than people expected them to.
Determining the lifespan of a Tesla battery is a complex task due to the relatively short history of modern electric vehicles (EVs) and the evolving nature of battery technology. While the first EVs emerged in the 1800s, the first batch of Tesla's mass-produced Model S only recently turned 10 years old. Furthermore, battery cell chemistry, design, and management systems have undergone numerous improvements over the past decade, making it challenging to provide a definitive answer based on past data.
Tesla's battery warranty offers some insight into the expected degradation of its batteries. Prior to 2020, Tesla provided an eight-year, unlimited-mileage warranty on Model S and Model X batteries, which has since been revised to eight years or 150,000 miles. The company specifies that its batteries will retain at least 70% of their original capacity during the warranty period. Additionally, Tesla estimates that its batteries are designed to last the life of the vehicle, roughly 200,000 miles in the U.S. and 150,000 miles in Europe, with the Model S and X batteries retaining about 90% of their original capacity on average over 200,000 miles of use.

Real-world examples of high-mileage Teslas provide further evidence of battery longevity. Some owners have reported impressive mileages, such as a 2013 Model S P85 that reached over one million miles with the original battery pack replaced at 180,000 miles. A 2016 Model X 90D used by a shuttle service company in California reached 300,000 miles with only 12.6% battery degradation. Additionally, a 2018 Model 3 Long Range RWD reached 200,000 miles with 13.7% degradation, and another owner reported around 7% capacity loss on a 2018 Model 3 Long Range at 100,000 miles.
To check battery degradation, owners can compare the displayed range with the EPA-rated range or use a battery health test available in Tesla's Service mode. While imperfect, these methods provide an estimate of battery degradation. In the event of an out-of-warranty battery replacement, Tesla typically uses remanufactured battery packs, which can cost between $10,000 and $20,000 depending on the model, local labor costs, and taxes. Tesla ensures that the replacement pack has equal or higher capacity than the original, preventing range loss for customers.

Tesla supply chain is vertically integrated — "Tesla is a chain of start-ups." - Elon Musk

Historically, manufacturers would outsource as much of their supply chain as possible so they could focus on supply chain management. This was the trend starting in the 90's and going through to the early 2010's. This would reduce initial production costs but did not allow for them to innovate or advance/reiterate their tech quickly.
Starting in 2012, after the legacy manufacturers recovered nicely from the 2008 crash and competition became more fierce. Tesla's supply was almost entirely third-party sourced, and they did not like this. It kept their costs high and their tech behind. So they started to vertically integrate their supply chain. This means that they would start to produce their own parts and materials.

Here's the advantages/disadvantages of Teslas vertical integration

• Improved Quality Control — Direct oversight allows for immediate rectification of issues, ensuring that the end product consistently meets consumer expectations. By integrating various stages of the supply chain in-house, companies can minimize dependence on external suppliers, reducing the risk of quality variations caused by external factors and ensuring consistent quality. Additionally, vertical integration allows companies to have direct control over raw materials used throughout the manufacturing process, ensuring that only high-quality materials are utilized. This control ultimately leads to better end products.

• Quick to Iterate and Innovate — If a Tesla engineer decides that their seats need 12-way power adjustment, they can start to work on it tomorrow, and it would be highly integrated with the systems they already have. This is a huge advantage over legacy manufacturers who would have to wait for their supplier to make the change and then integrate it into their system. This is why Tesla can make changes to their vehicles so quickly.
• Better Logistics — Because everything is made "in-house", parts are often made in the same area as the vehicles they are assembled for. This reduces the cost of shipping and the time it takes to get the parts to the assembly line. Having shorter supply chains reduces cost, carbon footprint, time to market, and increases flexibility.
• High Upfront Cost — Implementing vertical integration requires substantial initial investments. Tesla must allocate significant resources to acquire or build the necessary assets, which can strain their financial position — this may contribute to Tesla not upgrading parts as often as they could because they want to keep the production run going as long as possible to recoup the initial investment.
• High Risk — If Tesla fails to manufacture an adequate number of units for a specific part because of low demand for the corresponding vehicle, the company will incur substantial losses. Unlike third-party parts manufacturers, Tesla will not sell this product to external companies, which would otherwise help mitigate the initial expenses related to research, development, tooling, and production.
• Increased Organizational Complexity — As Tesla integrates vertically, it takes on additional responsibilities across various stages of the supply chain. Managing these diverse functions can lead to organizational complexity, potentially affecting decision-making and agility.

Wrapping Up

Tesla has a clear vision for the future of EV's — and is investing in both the customer facing products (the vehicles themselves) and the backend like supercharging, battery tech, and supply chain. Tesla's do have build quality issues relative to other manufacturers, but they are improving. This is why Tesla is king of EV's and will be for some time.