Tesla CEO Elon Musk this week reversed course on an aggressive push to manufacture electric vehicle chargers in the U.S., a key priority of the Biden administration, and said he would be redirecting competitors, suppliers and his own employees. made the members blind.
Mr. Musk's decision to lay off the 500-member team responsible for installing charging stations and significantly delay investment in new stations has perplexed the industry, with the number of public chargers outpacing car sales. raised questions about whether the rate of increase would increase. battery powered car. This puts a strain on other charging companies and raises questions about whether charging companies can build fast enough to address the shortages that seem to be deterring some people from buying electric cars. is causing it.
As the owner of the largest charging network in the United States, Tesla has a huge impact on how people view electric vehicles.
“There's definitely a psychological component,” said Robert Zebors, senior partner at consulting firm Roland Berger. “Availability and reliability are critical to overall EV adoption.”
The about-face comes just days after Tesla told shareholders in a securities filing that it would “rapidly” expand its charging network, which it calls Superchargers, with a focus on both coasts and the Southeast. There is a high possibility that the construction of fast chargers in the area will be delayed. Part of Texas.
New York real estate developer Wildflower was on the verge of signing a lease with Tesla to build a charging center near the intersection of Interstates 278 and 495 in Queens. Then Adam Gordon, the firm's managing partner, received a text message from a Tesla executive he worked with.
Gordon said the Tesla manager said, “'Hey, I got fired at 4 a.m., and so did my boss.'” “That was the only communication we got from Tesla,” he added.
Gordon said it's likely another charging company that has permission to acquire power will take over the site. However, it is inevitable that the project will be delayed due to Tesla's withdrawal.
No other company has more experience and expertise in installing charging stations than Tesla. Charging station installations range from a few plugs in the corner of a parking lot to dozens at dedicated sites, often along highways.
The company accounts for 25,500 of the 42,000 fast chargers installed in the United States, according to federal data. A fast charger can charge your electric car battery in 10 minutes to an hour, depending on the car and charger. There are approximately 132,000 slow public chargers that can fully charge an electric vehicle in approximately 8 to 12 hours.
Tesla began building Supercharger stations in 2012 to give Model S sedan owners a place to fuel up on road trips. Buyers of the Roadster, an early model of the sports car, primarily bought it at home.
Other companies may not be able to build chargers as quickly or as cheaply as Tesla, said Daniel Bowermaster, senior manager of electric transportation at the Electric Power Research Institute, a nonprofit organization in Palo Alto, Calif., where Tesla was once headquartered. He said he could not.
“Regardless of what Tesla does, there's a huge opportunity,” Bowermaster said. “The market will take care of that. How can we make that happen in a timely and cost-effective manner?”
But some industry insiders say Tesla won't be as lonely as it was a few years ago. Government subsidies and private capital have led to a surge in Tesla-independent charger construction. The number of public fast chargers in the United States increased by about 11,000, or about 36 percent, from April 2023 to April 2024.
“The public charging experience will become even easier,” said Peter Slawik, an automotive expert at the International Council on Clean Transportation, a research organization. “I don't think the charging market or the electric vehicle market is slowing down because of Tesla.”
Tesla makes the charging hardware for its Supercharger stations at its Buffalo factory, which was needed a few years ago because there were few suppliers. Since then, many companies have started selling charging devices and the technology has become standardized.
Last year, virtually all major automakers selling cars in North America agreed to use Tesla-developed charging plugs starting in 2025, reducing complexity. Electric cars in Europe and China are based on different standards than those used by Tesla in North America.
Tesla's exit is “a normal step in the professionalization of the market,” said Jörg Høie, chief executive of EcoG, a Munich-based company that provides charging software.
Musk did not explain his rationale for cutting back on charger construction, but some analysts believe he was probably concluding that the more companies that enter the market, the harder it will be to make a profit from charging. Stated.
Tesla has not disclosed the financial performance of its charging business, but analysts say it requires capital and Musk would rather invest in artificial intelligence and robotics, which could lead to the company's It claims to encourage future growth.
“My guess is that the electricity and infrastructure costs to operate the network will far exceed what Tesla and other drivers have offered to date,” said Ben Battle Road Research President. Rose said in an email. “They can now focus on getting the most out of what they have installed.”
Tesla did not respond to a request for comment.
Another reason for Musk's dissatisfaction with charging is that Tesla may be regretting its decision last year to open its U.S. stations to vehicles from other manufacturers. By opening the door to Ford, Cadillac, BMW and other automakers, Tesla is making it easier for other companies to sell electric cars, helping those automakers chip away at Tesla's dominance in the U.S. market. there is a possibility.
Raj Rajkumar, a professor of electrical and computer engineering at Carnegie Mellon University, said Musk's rationale was that “people would take advantage of Tesla's infrastructure and buy cars from other manufacturers.” He added that he believes Musk's decision to roll back the introduction of new chargers is a mistake that will make it harder for more car buyers to switch to electric cars.
Tesla is among a number of companies applying for grants under the federal program, which aims to have 500,000 fast and slow chargers in operation by 2030, up from about 200,000 now. It is one of the companies. Combined with state and local incentives, federal funds can cover nearly all of the cost of a charging station.
“If Tesla stops bidding on these products, the distributors that provide them will go to other operators,” said Badar Khan, CEO of Los Angeles charging company EVgo. Told. “There are a variety of participants.”
Kahn said the 500 charging employees Tesla laid off will likely take their expertise elsewhere. “There are some very talented people coming into the market,” he said. “We are currently in discussions with individuals.”
EVgo announced in March that there were nearly 3,000 charging stations at the end of last year, a 37% increase compared to the end of 2022.
Utilities, which need to upgrade their equipment to support expanded charging options, said the fast-charging network is just one part of a broader strategy and will not be changed by Tesla's decision.
“It's no secret that Tesla is a significant player in electric vehicle charging,” said Chanel Parson, director of clean energy and demand response for Southern California Edison, the state's second-largest investor-owned utility. It's a fact.'' But he added: “They're not the only players.”
The utility has 500 projects in various stages of development for 14,000 chargers focused on light, medium and heavy vehicles. To meet California's goal of net-zero greenhouse gas emissions by 2045, Persson said, 80% of buses, 54% of heavy-duty vehicles, and 90% of light and medium-duty vehicles must be electric. He said it needed to be a car.
“There are a lot of partners in this space who are working together to make that happen,” she said.
Government officials responsible for financing and promoting electric vehicles said they were not disappointed by Tesla's decision to withdraw from charging.
The Biden administration's Energy and Transportation Integration Agency said in a statement that thousands of chargers come online each month, adding that it “does not expect individual company decisions to impact EV charging projects.” .