Alexandra Buxbaum/Sipa USA via AP Images
The problem of EV charging interoperability is being solved—but mostly on Tesla’s terms.
Last year, the Biden administration made a smart move to guarantee universal access to electric-vehicle charging stations. As a condition for accepting some of the $7.5 billion in public funding available to build out charging networks, companies would have to make their chargers interoperable to any EV.
There was really only one target for this effort. Practically every EV automaker had already committed to the Combined Charging System (CCS) plug. The sole holdout was for Tesla, which used a proprietary port that it decided to call the “North American Charging Standard” (NACS), even though at that time it wasn’t standard at all.
When Tesla agreed to abide by the government’s conditions and open up its “Supercharger” stations to all cars, it looked like the problem was solved. And the problem is being solved—but mostly on Tesla’s terms.
In a jarring turnaround, it appears that Tesla’s NACS will supplant CCS in the next couple of years. The shift started back in June when Ford and GM announced their intention to adopt the NACS plug for 2025 models. Polestar, Volvo, Rivian, Mercedes, and Nissan quickly followed suit, and Stellantis and Toyota are rumored to be considering NACS as well. As manufacturing scales up, this would soon put most EVs actually on the road in America in the NACS camp. When the automotive standards organization SAE International announced its support for NACS, and most of the independent charging networks like ChargePoint and EVGo said they would add NACS ports, the die was truly cast.
(Full disclosure: I’m a Volkswagen EV owner who uses Electrify America, one of the last holdouts on NACS because it was created by Volkswagen as a requirement of the Dieselgate scandal. Lucky big-brain me. UPDATE: Electrify America did announce support for NACS in late June, though it has only said it “will work to add NACS plugs by 2025.”)
Given the administration’s smart commitment to interoperability, this may seem like a footnote in history, reminiscent of the format wars between Betamax and VHS, or HD DVD and Blu-ray. But there is now a potential competition problem, where public EV charging in America is increasingly reliant on a single EV manufacturer. Tesla walled off its Supercharger network until it became challenging for other automakers to continue with patchwork alternatives. But killing off its rivals, and profiting from non-Tesla owners, could diminish U.S. charging infrastructure more than it builds it.
Tesla’s victory is clearly a testament to vertical combination, specifically the investment in its Supercharger network.
Tesla’s victory is clearly a testament to vertical combination, specifically the investment in its Supercharger network, which has more charging locations than all its rivals combined. The other networks, most of which do not have automaker support, have not been able to make EV charging into a viable business. The reason is most vehicle trips are quite short, and therefore drivers don’t need very much power to recharge their EV on a daily basis. Unlike gasoline, electricity is available to the home, and with modest upgrades, a “Level 2” charger can power up an EV overnight. Even a regular plug can charge an EV tolerably given enough time. So the independents are competing with home use, which means limited customers at their stations.
This has led to disinvestment and inoperable chargers; at my local Electrify America hub, at least three of the ten chargers are broken, and another nearby hub has been out of commission for weeks.
Tesla, by contrast, cross-subsidized its charging stations with other revenue to make them viable and boost sales to customers with range anxiety. With other carmakers switching to Tesla’s standard, the independents could shrink in direct proportion to Tesla’s growth, leaving this essential infrastructure at a standstill rather than in expansion, with more cars coming on the road every day.
Other automakers are trying to catch up; a consortium announced a $1 billion investment for 30,000 charging stations a couple of weeks ago. (The new network will have CCS and NACS plugs.) The consortium’s new network is at least an indicator that some in the industry think it would be unhealthy to have a competitor control access, pricing, and innovation of the main EV charging standard in the U.S. But they don’t expect all 30,000 to roll out until the end of the decade; this is a bit late in the game. Ford, which has its own deal with independent chargers, and Volkswagen, which has Electrify America, aren’t participating in the new consortium.
What’s crazy here is that we have the logical location for chargers everywhere in America. If the current network of gas stations just added EV chargers, we wouldn’t be talking about this. But gas stations are in a fight with utility companies all over the country over who gets to install the chargers, who pays for the upgrade, and ultimately who benefits. That has led to very slow adoption. Until that dispute is settled, and with the independent model in seemingly inevitable decline, Tesla is essentially in the driver’s seat.
Charging your EV at a public station means not only finding one with the right plug, but also having the right software, usually in the form of a phone app, to talk to the charging network and pay for the service. The Biden administration has recognized this as well, announced additional deals in February designed to “eliminate the current practice of loading up your iPhone with 30 different apps, depending on where you pull up to charge.”
If the current network of gas stations just added EV chargers, we wouldn’t be talking about this.
But that’s in the early stages, and by getting everyone to shift to Tesla’s Supercharger stations, the company clearly stands to benefit. It’s unclear how a non-Tesla driver will be able to use a Tesla Supercharger: Will they need a Tesla account and an app? Will they pay the same rate for electricity as Tesla owners? (The answer to that is almost certainly no; other companies like Volkswagen and Hyundai routinely build discount deals into the purchase of their EVs.) Indeed, analyst Piper Sandler estimates that Tesla will earn $3 billion from non-Tesla owners by 2030 from charging fees.
Moreover, the fate of the millions of CCS cars on the road remains a question. Now that Tesla forced most EVs onto its standard, will it follow through with its interoperability promises? So far, there are fewer than 100 CCS ports at Tesla Supercharger stations. Some users will be able to use adapters—that’s the plan for Ford and GM owners—but that brings us back to the software operability issues.
There’s a separate security issue with EV chargers, and if networks are consolidated further, that just makes the opportunity bigger for hackers.
And Tesla getting the whole industry to adopt its NACS plug could be a model for a side business in supplying technology to other carmakers who don’t want to invest capital in EVs. Under the hood, all cars could be Teslas; just the body shapes and brand names would be different. “At what point will the legacy car companies realize that they also don’t need to build their own batteries and chassis and drivetrains,” one analyst proffered to Axios.
This is something that could spur the competition authorities to action. You’re talking about an electric-vehicle landscape, backed by public subsidies at every level, that could come down to Tesla plugs, Tesla chargers, Tesla batteries, and Tesla technology. That offers a ripe set of possibilities for abuse and exploitation.
Meanwhile, the Biden administration might conclude that if the EV charging business is falling into the hands of one EV company, the free market isn’t figuring out the transition to EV charging networks.
