Note: This article was originally written on May 27. On May 29, Tesla closed at $104.
A lot of suspense has been built into next week's Supercharger announcement since Elon Musk first tweeted it, then delayed it till next week due to the secondary offering:
However, the broad financial situation of Tesla (NASDAQ:TSLA) has changed dramatically since it raised more than $1 billion last week. Suddenly Tesla has a lot more capital in the arsenal. Nobody had expected such a dramatic change. And given the supercharger announcement was long planned as part of the 5 part trilogy before such change, the speculative minds can't help but wondering what is in store for next week's announcement, now with this new pool of capital. What would you do if you were the one and only Elon Musk?
Obviously there are developments to faster supercharging technology, but that is another intriguing thread by itself. Issues like how many supercharger stations have been deployed or will be in the near future are kind of set in stone. However, with more than $550 million in cash after paying off the DOE loan, one can confidently speculate that the mastermind of Tesla will up the ante and pull out something spectacular.
He is the mastermind behind Model S, a beautiful, practical, powerful, luxurious, environmentally conscious and technologically advanced automobile that crushes competition like the old Soviet hockey teams. It's an automobile that is simply too good for Germany; the proud auto nation found themselves slapped in the face. Musk now has the opportunity to announce something spectacular that he didn't even plan two weeks ago. Fellow Tesla longs and shorts, we are talking about a virtually empty map of United States and Europe - all he has to do is place lots of stations on the map.
Let's face it, Musk has proven that he is all for extraordinary feats. The first time I test-drove the Model S, I was simply overwhelmed. How could someone build such a car from scratch? Then the more I learn about Tesla, SpaceX and SolarCity, the more I am in awe, the more I am convinced that he stretches and comes out with innovative solutions to each challenge. I simply could not fathom someone could run two and one-quarter revolutionary companies at the same time.
Some facts first:
1. Each Supercharger station costs around $250,000 to install.
Let's say we accelerate the installation of Superchargers to the cover the whole U.S.. That is $250,000 x 200 = $50 million.
Now adding Europe, maybe another 200 Superchargers (big deal), for another $50 million.
So in my wildest speculation, Tesla will announce that it will spend $100 million to accelerate the Supercharger installation throughout the U.S. (how about all of North America?!) and Europe. All model S owners could drive across the country and within two continents for free.
It would be a bonus is if the rollout can be completed by the end of 2013. I do expect it will be way ahead of the original schedule, which is by the end of 2015.
This is a simple task: Give Musk an empty map and new flush of capital; he will draw something on the map beyond our imagination.
Oh just one more thing, if Musk indeed follows up on the other intriguing tweet:
Coupled with an accelerated rollout of Superchargers, this effectively removes the only drawback of Model S. Beyond the near-perfect score Model S gets from Consumer Reports, Jake Fisher, head of auto testing for Consumer Reports, further comments: "If it could recharge in any gas station in three minutes, this car would score about 110."
And I say Jack is right on the money by calling a score of 110 for the Model S. As of this quiescent Memorial Day of 2013, TSLA stands at $97.08, not as perfect score as the Model S. But I will go out on a limb to call $110 for TSLA when the announcement comes out.
Disclosure: I am long TSLA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.