When you buy a good or service, part of what you are buying is the infrastructure around that service. Can you bring it back? can you fix it? Most of the time, these questions are not on the front of your decision making, but they help you make a final decision. For brand new products on the market, the infrastructure tends not to be nationwide, it is typically regional in nature.
In the Electric Vehicle world, one aspect of the infrastructure is charging the vehicle. At some point the gas stations will have both gas for internal combustion engines and something for electric vehicles, but we are not there yet.
In an article from the Associated Press, Mercedes announced they are building a worldwide electric vehicle charging network starting in North America.
The cost of the network in 2023 will be $1.4 billion. When completed in 7 years, the network will have 400 charging stations with more than 2.500 high-power plugs. The full network worldwide will be 2,000 charging stations and 10,000 plugs.
The stations will be open to all owners of electric vehicles, but Mercedes owners will be able to reserve charging ports and receive preference over other makes.
Telsa has 40,000 charging ports worldwide, but the network is for the exclusive use of Tesla owners. Elon Musk said there ae no plans to open them up to other electric vehicles.
Linking to dividend paying stocks, one of the barriers to entry for many companies is the infrastructure that exists which helps keep its competitors out. Some of the barriers are by government regulation, but the barriers are something the company is not receiving any funds for, i.e. building a charging system. The name is shown, the station will have to be in keeping with Mercedes status, but Mercedes does not receive an income. If the barriers help keep out the competition, then it is worth investigation the company which benefits. Barriers or moats can be a good thing in investing.
There are more questions than answers, till the next time – to raising questions.