© Reuters. FILE PHOTO: A Tesla is charged at an electric car charging station in Los Angeles, California, U.S., August 2, 2018. REUTERS/Lucy Nicholson
By Hyunjoo Jin and Jarrett Renshaw
SAN FRANCISCO (Reuters) – Tesla Inc will open up part of its US charging network to electric vehicles (EVs) made by rivals as part of a $7.5 billion federal program to expand EV use and reduce carbon emissions.
The move could help turn Tesla (NASDAQ:) into the universal “gas station” of the EV era, and risks eroding a competitive advantage for vehicles made by the company, which has exclusive access to the most largest high-speed supercharger in the United States.
By the end of 2024, Tesla would open 3,500 new and existing superchargers along highway corridors for non-Tesla customers, the Biden administration said. It would also offer 4000 slower chargers in places like hotels and restaurants.
Biden wrote on Twitter that the plan to open up a “big chunk” of Tesla’s network to all drivers was a “big deal” and would “make a huge difference.”
In response, Tesla CEO Musk said, “Thank you, Tesla is pleased to support other electric vehicles through our Supercharger network.”
A White House official told a briefing that Tesla would be eligible for a subsidy, including upgrading its existing fleet, as long as its chargers allowed other vehicles to be charged with a federally-backed charging standard called CCS.
The administration said Tesla had not committed to adopting CCS as its standard, but it must meet the requirements to qualify for federal funding.
Tesla has 17,711 superchargers, representing about 60% of all US fast chargers, that can add hundreds of miles of range in an hour or less. There are also about 10,000 “destination” chargers with Tesla plugs that can charge a vehicle overnight.
Opening up access to Tesla’s network would be a quick win for an ambitious federal program to build 500,000 EV chargers by 2030, up from 130,000 today.
“Select Tesla Superchargers in the US will soon be open to all EVs,” Tesla wrote on Twitter, without elaborating on when, where and how it would open its chargers. He had already planned to more than double his US supercharger network by the end of 2024, he said.
CONNECT AND PAY
Businesses hoping to take advantage of federal funding for this network must also use standardized payment options that require a single identification method that works across all chargers, the administration said.
All EV drivers would be able to access these stations using the Tesla app or website, he said.
Adding non-Tesla owners may require a different plug and payment method.
“Tesla has a hardware and software solution” to enable CCS, the White House official said.
Investors and EV enthusiasts in the US have been waiting for action on chargers from Musk, who said in 2021 that the goal of his charging network was “not to create a walled garden and use it to bludgeon our competitors”. The company has opened some Superchargers in Europe and Australia to non-Tesla owners since 2021.
Analysts said the amount of federal funds at stake meant Musk had to go along with the plan or risk other charging companies, such as EVgo Inc and ChargePoint Holdings Inc, taking over the market.
“The amount of money involved in the National Electric Vehicle Infrastructure Formula Program provides a strong incentive for Tesla to adapt its strategy to include the installation of CCS ports,” said Sam Houston, senior vehicle analyst at the Union of Concerned Scientists. .
Chris Harto, a senior policy analyst for Consumer Reports, said: “There’s no question that the $7.5 billion in federal investment in charging threatens Tesla’s competitive advantage. That’s really the whole point of the program.”
Opening up its networks could expand Tesla’s funding and revenue, but it could also erode the brand’s exclusivity and make it more difficult for the automaker to manage the network, analysts said.
“There is a very good chance that if they open up the Supercharger network to other vehicles, their current excellent reliability rate will drop significantly,” said Sam Abuelsamid, an analyst at Guidehouse Insights.