Mary Barra, the CEO of General Motors, and Elon Musk, the leader of Tesla, may be rivals in the business world, but their recent Twitter exchange showcased a friendly rapport. They discussed a potential deal that could address a major obstacle to electric vehicle adoption: the scarcity of charging stations. Barra praised the Tesla team, and Musk expressed his honor in working with her.
However, behind the pleasantries lie strategic considerations. General Motors, Ford, and other companies collaborating with Tesla are relying on the electric car company’s help. Tesla not only outsells all other automakers in the US combined but also operates the country’s largest network of fast-charging stations. Yet, this collaboration poses risks for the rest of the auto industry, which must depend on Musk, a somewhat unpredictable leader, for crucial charging technology.
Unlike other technical standards overseen by independent organizations, Tesla’s proprietary charging system, now referred to as the North American Charging Standard, remains under the company’s control. Tesla claims it will eventually hand over control, but competitors are skeptical about the extent of the transfer. Furthermore, Tesla’s exclusive charging access could be a sales advantage, as customers may hesitate to wait behind other vehicles.
Disputes over technical standards are common in the development of new technology and can prove costly for companies and consumers. The stakes are even higher in the automobile industry, as cars are substantial investments, and transitioning to electric models is critical for combating climate change. Industry officials fear that the ongoing corporate arguments surrounding charging technology could discourage potential buyers, leading them to wait until a clear winner emerges.
Most automakers, including Ford and General Motors, have been building cars with Combined Charging System (CCS) plugs, the standard in Europe. Charging networks like Electrify America and EVgo predominantly offer CCS plugs. Tesla’s plug is more lightweight and user-friendly but only compatible with its own vehicles. Under the agreements with Ford and General Motors, Tesla plans to introduce an adapter in early 2022 that will enable their cars to connect to approximately 12,000 Tesla fast chargers in the US. By 2025, Ford and General Motors intend to design models that can directly use the Tesla plug without an adapter.
The collective influence of Tesla, General Motors, and Ford will likely push charging network operators to install Tesla plugs, potentially rendering CCS plugs obsolete in North America in the coming years. Rivian, a smaller electric vehicle company, recently announced its shift to the Tesla plug, and other automakers are considering the same move. Their objective is to facilitate convenient and accessible charging for customers.
As the Tesla plug becomes dominant, owners of CCS-compatible vehicles will increasingly rely on adapters that have voltage limitations and charge at a slower pace for safety reasons. One advantage attributed to Tesla’s system is its reliability and user-friendliness compared to CCS chargers, which can sometimes be finicky. The frustration with existing charging networks partly motivated Ford and General Motors’ decision to join forces with Tesla.
Tesla built its charging network in 2012 when there were few charging options available for its Model S. The company does not disclose financial details about its network, but experts speculate that Tesla incurs losses on charging services in order to drive car sales. Tesla’s charging infrastructure offers 19,700 ports across the US, while CCS provides 10,500 ports. However, only 12,000 Tesla chargers will be accessible to Ford, General Motors, and Rivian vehicles.
The decision of other automakers to collaborate with Tesla, a competitor, reflects an acknowledgment of Musk’s company’s extensive experience in operating a charging network. Musk has assured General Motors and Ford customers that they will receive equal treatment as Tesla customers. However, questions remain regarding the safety of the charging equipment and its compatibility with non-Tesla vehicles, as well as the resolution of potential disputes between Tesla and other automakers.
Tesla is in discussions with the Charging Interface Initiative to designate it as the overseeing body for its technology, similar to its role with CCS. However, given Musk’s criticism of CCS, it remains uncertain if he prefers an alternative arrangement. Competitors are banking on potential government intervention if Tesla were to establish a charging monopoly, while some are grateful that a leader is emerging to address a significant obstacle to electric vehicle sales.
The EV industry is experiencing rapid growth, and the collaboration between Tesla, General Motors, and Ford is expected to drive further progress. Blink Charging, for instance, plans to install Tesla plugs into its network.
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