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What is the ROI on BP's $100 million purchase of Tesla Superchargers?
For a while, $BP has been focused on creating its own electric vehicle charging network. So far, we know BP has installed more than 27,000 EV charging stations and plans to install 100,000 more by 2030. In the past, BP has purchased the charging station equipment from Tritium but now wants to purchase them from $TSLA. While $100 may look like the start, BP plans to invest $500 million in developing EV charging infrastructure in the next two to three years.
BP Pulse charging stations that now include Tesla Supercharger hardware inside. (Image: BP)
Let's model the potential ROI of this bold investment by BP. Here are our assumptions:
- $100 million is spent on Tesla EV charging equipment
- At $25,000 per stall, they acquired 100,000,000 / 25,000 = 4,000 stalls
- 4,000 stalls x 10 uses per day x 30 mins per use = 200,000 charging sessions daily
- Each charge uses 35 kwh, so 7 million kwh used daily or ~2.6 billion kwh used annually
- The customer is charged $0.25 per kwh and the utility company charges BP $0.15 per kwh
With these assumptions, here are the results:
- Daily revenue = $1,750,000 ; Annual revenue = $650 million
- Daily cost = $1,050,000 ; Annual cost = $390 million
- Daily gross profit = $700,000 ; Annual gross profit = $260 million
Using gross profit, $BP would be generating a 2.6X return on their investment in buying Tesla's superchargers. With the size of its operations, BP can scale its EV network development and lower the cost of installation per stall. If BP wanted to, it can be the sole provider of energy for the supercharging stations and lower its cost per kwh. The recurring revenues that BP will receive with this new electric vehicle charging station network will make the investment worthwhile.
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