Written by Jarrett Renshaw and Hyunjo Jin
(Reuters) – Tesla CEO Elon Musk has often talked about opening up his Supercharging network to competitors, but has never done so in the United States, where the company dominates the electric car market.
Now the cocky CEO might have 7.5 billion reasons to speed up those plans.
The Transportation Department is expected next week to finalize requirements that would force Tesla to go beyond its own charging equipment in the US and add a charger used by its competitors, administration officials told Reuters.
Otherwise, the automaker will miss out on $7.5 billion in subsidies flowing out of Washington as part of President Joe Biden’s plan to put 500,000 electric car chargers in the country in the coming years, up from 100,000 in 2021.
The grid is a central part of Biden’s plan to fight climate change by switching 50% of all new car sales in the US to be electric by 2030. A shortage of chargers on US roads has slowed the growth of electric car sales and the positive impact on the environment, supporters say.
As U.S. pressure mounts, there are many signs that Tesla is on the verge of democratizing its network, even as Musk has previously denounced federal government involvement.
Last January, Tesla wrote to the Federal Highway Administration offering the Biden administration proposals to shape the charging program. In Ohio, the company responded to a recent request for companies to submit charging proposals, state officials told Reuters. In Arizona, the company has told the state it is willing to upgrade its chargers or build new ones to meet federal requirements, though no final decision has been made.
Musk met with White House officials last month in Washington, DC. Among the issues discussed was an electric vehicle charging program, White House infrastructure czar Mitch Landrieu told reporters.
Musk, for his part, said in a July 2021 earnings call that the purpose of Tesla’s charging network is not to create a walled garden and use it to bludgeon our competitors, but has not publicly discussed plans for changes in the US market. The company has opened several Superchargers in Europe and Australia.
An email to Tesla and Musk was not returned.
State officials are optimistic.
“We understand that Tesla is looking to adjust its system to make access more open. So if they get to that point and meet those requirements, they will certainly be eligible for funding,” said Stuart Anderson, director of Iowa’s Division of Transportation Development.
SUPERB DOMINATION
The Tesla Supercharger network in the US is often considered the gold standard: fast, reliable and plentiful, with around 40,000 chargers worldwide.
But for years the network has been exclusive to Tesla owners, thanks to an outlet that only connects to Tesla cars, meaning someone who drives a Volkswagen, Ford or Chevy won’t be able to use it.
Tesla drivers can purchase an adapter to connect to US-standard “Combined Charging System” or CCS chargers, but people who don’t own a Tesla can’t do the same with Superchargers.
Opening up the networks could increase the funding and revenue stream for Tesla, but could undermine brand exclusivity and make it more difficult for the automaker to manage the network, analysts say.
“It’s definitely a balance for them: how much potential federal subsidies to expand their network versus maintaining that competitive advantage by paying a fee,” said Chris Harta, senior policy analyst at Consumer Reports.
The Transportation Department next week will detail final requirements that all electric vehicle chargers must meet to be eligible for funding as part of a $7.5 billion effort to electrify highways and interstates across the country. These requirements will also affect cybersecurity and how many and which parts of the charger must be made in America.
Chargers that seek to be part of the National Electric Vehicle Infrastructure (NEVI) program must use the combined charging system, or CCS, standard in the US at almost all charging stations except Tesla’s popular Superchargers.
The administration’s move to finalize the so-called “minimum standards” is expected to unlock the first wave of funding and kick off a fierce competition between companies such as ChargePoint Holdings and EVgo Inc. For these small companies, this represents a generational opportunity.
Any charger that wants to be eligible for federal dollars will have to meet the CCS standard once the rules are finalized next week, administration officials told Reuters.
Last year, Tesla proposed a different idea. In its letter to the FHA, the company suggested that its Superchargers could receive rebates when co-located with competing CCS chargers.
An administration official told Reuters the request was not being seriously considered.
(Reporting by Jarrett Renshaw in Washington and Hyunjo Jin in San Francisco; Editing by Heather Timmons and Nick Ziminski)
