A standards war? A win for consumers? What the Ford and GM Tesla deals mean


The news that rocked the electrical transportation world earlier this month — General Motors’ deal to present its drivers access to the Tesla Supercharger network — is little doubt an enormous turning point for EVs within the U.S. It followed an analogous deal in May between Ford and Tesla. Together, these pacts could have serious ripple effects for the event of the charging network across the country.

But additionally they generate loads more questions than answers. Will these partnerships create a standards war between kinds of EV chargers? And can that hurt or help consumers? Experts don’t agree on that time, and so they make various predictions for what this news portends. It could usher in a recent model for charging akin to gas stations, or it could possibly be little greater than a blip for drivers who will simply find yourself with loads more charging options.

“I believe it’s great news for the industry, and more generally for EV drivers, and for accelerating the electrification of the transportation fleet,” said Jeff Allen, executive director of Forth Mobility, an electrical transportation advocacy group. “It’s creating more options for people to charge, for one thing. And additionally it is going to push everybody to up their game when it comes to reliability and customer experience.”

That’s because Tesla’s proprietary charging network is essentially viewed because the gold standard of charging experiences with a high bar for reliability and uptime, unlike the comparatively patchy reliability and availability of the network of public chargers.

We peacefully coexist for essentially the most part.

But Tesla’s chargers also deviate in a single crucial way: They use the NACS (North American charging standard) format fairly than the CCS (combined charging system) standard backed by the federal government and, until recently, nearly all other American automakers.

This distinction has been an enormous point of contention within the aftermath of the Ford and GM news, with some asking if this crowns NACS because the de facto nationwide charging standard. However it’s far too early to make such a prediction, in line with Allen, who has spent greater than a decade within the EV industry.

“We’ve been through this before,” Allen said, noting the previous debates over the CHAdeMO charging standard, whose only compatible U.S. automobile is the Nissan Leaf. He thinks of NACS versus CCS in the best way that many individuals take into consideration Mac versus PC computers, each of which have a base of hardcore followers. “We peacefully coexist for essentially the most part,” he said.

Allen doesn’t see any reason why charging operators won’t simply embrace each NACS and CCS, fairly than selecting a side. The federal government’s $7.5 billion program to construct out charging infrastructure is already behind CCS, and he predicts policy might eventually embrace dual-standard chargers, but finds it unlikely that the federal government will support NACS-only charging. “Really, it isn’t that arduous to place two cables on the box,” he said. (Indeed, the White House followed the Ford and GM news with its own announcement: Federal funds would grow to be available for NACS chargers so long as they include a CCS cable as well).

Plus, various charging corporations, within the wake of this Tesla news, have already announced they are going to add NACS capabilities to chargers that previously only offered CCS.

Is that this war?

One among those corporations is FreeWire Technologies, which made its move so as to add NACS to its chargers shortly after the Ford deal, but before GM jumped on board. Arcady Sosinov, the startup’s founder and CEO, sees the impact of the partnerships in starker terms than does Allen. 

“This effectively cements a standards war,” he said. “CCS will proceed, but NACS will proceed as well. And we’re taking a look at the following 10 years of standards wars battling out, and that’s never an excellent thing for consumers.”

Sosinov said he would have preferred just one standard, even when it was suboptimal, because having multiple standards and kinds of chargers drives up costs for everybody.

But Allen argues that the difference in charging standards just doesn’t have that much consequence for consumers. “I believe it is going to be really interesting for those of us who’re EV nerds to observe how this evolves,” he said. “But I don’t think it’s something that the typical driver really needs to fret about an excessive amount of.”

What comes next

Ford and GM probably won’t be the last automakers to partner with Tesla’s charging network. “It’s quite likely that we’ll see similar announcements coming,” Allen said. (Elon Musk, days on the heels of the Ford and GM news, invited Toyota to be the following partner.)

Tim Abbott, vp of corporate strategy at Hertz, is an enormous proponent of more partnerships within the EV charging arena. He helps lead the electrification of the rental automobile giant’s fleet, which up to now includes Tesla, GM and Polestar EVs.

This effectively cements a standards war.

“As soon as we saw it, we were thrilled,” Abbott said of the recent Tesla news. “Hertz has been championing the partnership mentality from day one.” The rental automobile company’s journey toward electrification has up to now involved partnerships with automakers, city governments and charging corporations. 

Abbott said Hertz is aiming to affect its entire fleet of 100,000 consumer rental vehicles by 2024 — educating customers and supporting charging infrastructure along the best way. The brand new Tesla partnerships with Ford and GM might weigh within the balance for future vehicle purchases, Abbott said, but he noted those decisions are dictated by customer needs greater than the rest. “Our goal is to have an electrical vehicle for anybody, for any use case,” he said.

In the event that they construct it?

Sosinov of FreeWire also believes more automakers will soon move to partner with Tesla. He argues that American automakers likely regret their decisions not to construct out their very own charging systems in the best way that Tesla has. What began as automakers’ optimistic bet on public charging networks quickly flourishing has became a drawback out there.

“Their historical decision to not construct a charging network looks really bad,” Sosinov said of most U.S. automakers. “And it ultimately hurt automobile sales. [The Ford and GM deals are] not a savvy play; it’s a life or death situation. Their hand was forced. How do you sell cars when you don’t have the charging?”

The Tesla partnerships even have the potential to shape how public charging is funded and inbuilt a broader sense, Sosinov said. Currently, major charging installers similar to EVGo rely on a somewhat wide margin in charging prices, which derives from the relative scarcity of public chargers; in other words, customers are willing to pay high prices because fast charging, especially, is a rare commodity.

It could push the EV charging industry closer to a gas station model, where operators sell gas at a loss but make up revenue from the shop.

“If charging infrastructure becomes an increasing number of ubiquitous, the electrons grow to be less scarce, and people margins should compress to normal commodity margins,” Sosinov said. “By opening up the network to GM and to Ford, what [Tesla has] effectively done is added to the availability of electrons.” 

And if that depresses the costs on public chargers, Sosinov said, it could push the EV charging industry closer to a gas station model, where operators sell gas at a loss but make up revenue from the shop. The last word result could position retailers similar to Walmart because the more natural owners of charging infrastructure, using it as a way to attract people into the shop, he added.

His company’s chargers — which mix charging stations with large batteries to scale back strain on the electrical grid — are situated mostly at BP, Chevron and RaceTrac gas stations that already lean into this model. “That’s where America goes to purchase stuff, and that’s where they’re probably going to go to charge,” Sosinov said.

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