Tesla charging cuts threaten US network buildout

Musk signals slower NACS growth as US EV industry may rue its overreliance on Tesla's charging dominance

Tesla charging cuts threaten US network buildout
Elon Musk says Tesla will slow the expansion of its charging network

CEO Elon Musk says that Tesla will continue to expand its charging network at a slower pace, after fresh layoffs at the automaker decimated its charging business.

The dismissals of key charging executives, including senior director of charging Rebecca Tinucci and special projects design lead Jia Liu, are confirmed by posts on networking site LinkedIn. Hundreds of other charging staff have also reportedly been let go. Musk, however, insists that the cuts do not signal a fundamental shift in the OEM's charging plans, but only a strategy tweak.

"Tesla still plans to grow the Supercharger network, just at a slower pace for new locations and more focus on 100pc uptime and expansion of existing locations," the CEO wrote on his own social media site X, formerly Twitter.

US policy, and indeed previous Tesla charging strategy, has arguably aimed at incentivising quantity over quality in terms of charging sites. For example, the US Bipartisan Infrastructure Bill has invested $5bn to build so-called 'alternative fuel corridors' of charging locations every 50 miles.

Tesla pivoting to expanding its existing locations at the expense of widening the charging network — while improving throughput and customer experience at those sites  will not broaden the availability of charging across the country.

Improved uptime and larger sites could instead mean greater charging revenue for Tesla's charging business, as well as better profitability if the company spends less on new sites. Tesla has previously characterised its opening up of its NACS network to other OEMs as an attempt to boost overall EV adoption, but the new strategy signals that Tesla is reprioritising its own efficiency and margins.

It is likely no coincidence, either, that Tesla both has less appetite to try to help drive EV adoption — potentially at the expense of its own bottom line — as more competitive products from other OEMs emerge, and when the supercharger network no longer offers the exclusivity benefits to drive customers into the Tesla ecosystem. Even prior to Musk's call for a slowdown, Tesla was not set to sustain its share of overall growth in US capacity.

"Tesla currently commands 62.5pc of DC fast charging ports in the US, but based on the year-to-date run rate, the company was heading toward opening about 57pc of all new DCFC ports," says Loren McDonald, CEO of EV charging data services consultancy EV Adoption.

McDonald warns that Tesla's deployment slowdown could drastically impair national charging rollout, as the firm's North American Charging Standard (NACS) has becoming the official industry standard.

"Tesla deploys more DC fast chargers each year than all other fast charging networks/CPOs combined — a slowdown in supercharger expansion could mean that the total number of new stations and ports opened in the US in 2024 and 2025 would see flat growth for three years," McDonald cautions.
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But there was always risk involved in relying on Tesla's charging network to the degree that the EV industry so far has. If charging rollout falters because of Tesla's decision, it will be an indirect consequence of the shortcomings of competing charging hardware and networks. And it could hurt both Tesla and the industry more widely.

"A signal to the market that supercharger expansion might slow could have the unintended consequence of some Tesla buyers opting for a different brand of EV, or no EV at all," McDonald warns. "Some potential buyers of non-Tesla BEVs may get concerned that they may not have as much access to superchargers as they originally thought, that could also push some new car buyers to not buy a BEV."

However, Tesla has not suggested it will stop selling charging hardware to third-party CPOs to install. And although the layoffs may have rival OEMs' fretting about the knock-on effects for the EV market, competing charging firms may also look to bring on board the newly available surplus of talent.

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