Tesla has pulled ahead on EV charging. Now, the hard part begins

Will Tesla’s charging technology end up conquering North America? And if it does, will that disrupt or accelerate the transition to electric vehicles? 

The past few weeks have seen much Sturm und Drang around the news that U.S. automakers Ford and General Motors are pledging to make their future EVs sold in North America compatible with the fast-charging technology owned and operated by Tesla, rather than the Combined Charging System (CCS) technology standard that’s been adopted for the vast majority of non-Tesla EVs and charging stations in North America and Europe.

And a flurry of announcements from EV charging network operators such as EVgo, ChargePoint, Flo and Blink Charging and fast-charger manufacturers such as ABB North America, Tritium and Wallbox that they’ll support both CCS and Tesla’s technology has prompted predictions of the beginning of the end for CCS as the North American standard.

“You’ve got GM, Ford and Tesla. That’s 60 to 70 percent of the EV market in the United States,” said Nick Nigro, founder of Atlas Public Policy, which tracks data on EVs and charging networks, adding that ​“it’s just a matter of time” before other EV manufacturers follow Ford and GM’s lead and switch to Tesla’s technology.

But that’s not a universal view, to be sure. ​“As it stands, every international automaker selling in North America is sticking with CCS,” said Pavel Molchanov, director and equity research analyst at Raymond James & Associates. ​“If someone major — let’s say Toyota or Volkswagen — were to jump on the Tesla bandwagon, that would be needle-moving, but we will believe it when we see it.”

However, industry analysts do agree that Tesla appears to be the big winner in the EV-charging shakeup. The company could add $3 billion of revenue in 2030 from non-Tesla EV drivers as Ford and GM are followed by other automakers, according to a report from Piper Sandler.

Drivers may also gain by being able to access Tesla’s fast-charger network, which at 17,000 charging plugs is more than twice as large as the roughly 7,500 fast-charging stations available from all other providers in the U.S. combined. According to a yearslong independent study from J.D. Power, Tesla’s chargers also offer a more reliable and user-friendly charging experience than the less-than-stellar performance offered by most of its competitors.

Still, there’s a long way to go from these recent announcements to deploying the EVs, charging stations and underlying communications and software systems needed to realize them. Ford and GM don’t plan to have Tesla-compatible EVs on the market until 2025. Even the seemingly simple task of delivering an adapter that will allow existing Ford and GM EVs to plug into Tesla chargers won’t happen until next year, with manufacturers turning on a dime to produce this new technology.

These complications pose a challenge for an EV-charging infrastructure that’s already struggling to grow quickly enough to meet the state and federal goals for switching from gasoline to electric-powered cars. The U.S. will need between 500,000 and 1.2 million public charging ports by 2030 to support the Biden administration’s goal of having EVs make up half of all U.S. car sales by the end of the decade, according to various analyses.

Today, the country has more than 100,000 slower-charging Level 2 charging ports, but only about 31,000 direct-current fast-charging ports, according to the U.S. Department of Energy’s Alternative Fuels Data Center.

There’s also the problem of dealing with the EVs caught in between the two charger types.

“We’re going to be selling millions of EVs between now and when GM and Ford coalesce around this specific connector,” Nigro said. ​“How do we make sure the market accommodates those EVs and the millions that are already on the road?”

“That’s going to be a big challenge, and it’s going to be more expensive as a result because you have to add more hardware” to support multiple charging technologies, he said. ​“What will it cost the industry, and will it yield benefits down the road? That’s an unknown right now.”

A long road to the chargers the U.S. needs

The biggest public EV-charging companies in the U.S. have a problem: They face years of spending more money than they can earn from charging. That’s because they have to build chargers well in advance of the volume of EVs on the road rising to a high enough level that they break even. Supporting multiple charging technologies will add to those hard-to-recoup costs.

This isn’t a new problem for EV charging operators, to be clear.

CCS went through a nearly decade-long battle for North American supremacy with yet another fast-charging standard, CHAdeMO, favored by some Japanese automakers, including EV pioneer Nissan. While Nissan announced last year that it will switch to CCS for new EV models sold in North America, many EV charging stations still offer both technologies.

The Electric Power Research Institute, a nonprofit research organization largely funded by utilities, has outlined the problems that fragmented and nonstandardized EV charging technologies pose for EV adoption. Multiple charging technologies are just one of many complicating factors that EV drivers face, noted John Halliwell, senior technical executive at EPRI.

“If you’re thinking about EV charging standards, it’s really about the consumer experience,” he said. ​“When I use my bank card to get money out of an [ATM], there are probably dozens of standards and business relationships behind that machine and money coming out.” Consumers don’t have to know how complicated these behind-the-scenes integrations are, he said — ​“I want the experience to be simple.” 

Industry observers have praised Tesla’s charging system for its ease of use and streamlined support of future-forward features like ​“plug-and-charge” capability, which allow drivers to pay for charging without credit cards, subscriptions or other alternative forms of payment.

Meanwhile, the CCS standard — developed by standards body SAE International and spearheaded by CharIN (Charging Interface Initiative), an umbrella organization for more than 300 companies and organizations working on EV charging standardization — has gone through its fair share of growing pains, with different implementations from automakers and charging operators complicating its smooth operation in the field.

The question for Tesla, and the automakers that are crafting agreements to use its charging network and technology, is how well its chargers will perform with a much wider array of vehicles, all of which have hardware designed and software coded outside of Tesla.

“Tesla had it easy — [its charger] had to talk to three cars,” Nigro said. ​“It’s a lot different making that work across 100 EVs being upgraded with software every few months.” As this complexity grows, ​“I think they’ll run into a lot of the challenges that existing charging providers have experienced.”

What’s a standard? Why does it matter? 

It’s also important to remember that Tesla’s technology is not, in the strictest terms, a standard. That’s despite Tesla renaming it the North American Charging Standard (NACS) late last year as part of a pledge to open its previously Tesla-only charging stations to EVs from other companies.

Standards can be wickedly complex, but the important thing to note here is that Tesla’s tech isn’t entirely open to all parties who wish to build with it — usually a foundational tenet of standards.

Since it renamed its tech, Tesla has begun allowing a handful of its charging stations to serve CCS-equipped EVs via adapters, and it has made the underlying technical specifications of its charging technology available for download. But any companies seeking to make their EVs compatible with Tesla’s NACS will need permission from Tesla to access its charging network itself, as well as to write the software to integrate with its proprietary charging interface and billing systems.

But for NACS to take on the role of the dominant U.S. charging technology, ​“it behooves everyone involved to do a more formal standard-making process, at least in order to provide really clear ground rules for what is NACS and what isn’t NACS,” Nigro said.

It’s not clear yet how Tesla might go about making that happen.

The company stated in November that it is ​“actively working with relevant standards bodies to codify Tesla’s charging connector as a public standard.” (Tesla doesn’t have a media department, so it couldn’t be reached for a new comment.) It is also a member of CharIN, the group formed to promote the development of the CCS standard and another high-powered charging standard dubbed Megawatt Charging System.

But CharIN has made clear in recent weeks that, while Tesla does use some of the same standard-based communications technologies that are used in CCS, the company’s NACS technology is still ​“not yet a standard and does not provide an open charging ecosystem for industry to build upon.”

“There will be a lot of things to be added and updated to enable an open standard which can be used by all market participants to have an open market and not a monopoly by one supplier,” Michael Keller, CharIN executive board member, said in an email.

For that to happen, Tesla’s technology would need to go through a collaborative process overseen by a standards-development organization. CharIN wants to be Tesla’s partner in that standardization effort, and it has collected a number of companies to back its call, including automakers GM, Hyundai and Volvo and charging providers ABB, Electrify America, EVgo, Fermata, Flo, InCharge and Proterra.

Bringing Tesla’s technology into a standards-development process is certainly of interest to the EV charging network providers and equipment manufacturers now pledging to make NACS chargers available.

“Be careful when you talk about interoperability — that can mean a number of things,” said Mike Battaglia, chief revenue officer at Blink Charging. In the past few years, Blink and other major charging network providers have signed ​“roaming” agreements with one another to allow customers of one network to use and pay for charges at the stations of their competitors. But fully integrating a new charging technology takes quite a bit more work, he said.

“We can easily put a NACS cable on the charger, but what is really going to be the proof in the pudding is the accessibility of software development against that,” he said. ​“I think the absolute earliest we’d see this happen is 18 months from now. And this would be a minor miracle if all the stars align, which usually doesn’t happen.”

One of the major EV charging companies that has yet to make a commitment to support Tesla’s NACS charging technology is Electrify America. The company’s network of more than 3,500 predominantly CCS-based charging points in the U.S. is funded by parent company Volkswagen’s $2 billion Dieselgate settlement agreement with the U.S. government in 2016, and Volkswagen is a core member of the CharIN consortium.

“We’re continuing to support the adoption of EVs, and we’ll continue to monitor the marketplace and what customers want,” said Electrify America spokesperson Octavio Navarro. But he also highlighted that Tesla’s charging network is ​“a closed system.”

What does this mean for competing EV charging? 

It’s not yet clear how Tesla intends to modify its current charging station expansion plans to accommodate the coming deluge of non-Tesla EVs. Nor is it clear how the charging experience of Tesla owners might change as more and more non-Tesla EV drivers line up at the same charging spots that used to be theirs alone.

Competing EV charging operators maintain that the rapid growth of EV adoption will increase demand for chargers from a wide variety of providers, even with a switch to NACS. 

“One of the things that is abundantly clear is that Tesla will not be able to build out or modify their existing network to satisfy their own customers as well as GM, Ford and any other OEM that adopts the technology,” Blink’s Battaglia said. ​“The EV ecosystem is going to need companies like Blink to build out that fast-charging infrastructure with NACS cables.”

But as Chris Nelder, a former EV charging analyst and current host of the Energy Transition Show podcast, noted in an email, the wide discrepancy that now exists between Tesla and other EV charging operators in terms of customer satisfaction and reliability may spell trouble for competing charging networks over time. In other words, he thinks it’s possible drivers will opt for Tesla-owned and -operated chargers over third-parties when given the option.

“This is going to be hugely disruptive for all of the third-party networks, notwithstanding their confidence that their already-underutilized chargers can continue to get by just serving non-GM and Ford customers,” Nelder wrote.

But Molchanov of Raymond & James has a different take. ​“The conventional wisdom right now is that Tesla’s NACS is like VHS, and everyone else using CCS is like Betamax,” he said, invoking the oft-repeated trope in media coverage comparing the current EV charging battle to that fought between home videotape formats in the 1980s. VHS eventually won the war among consumers, leaving owners of Betamax equipment with a severely limited set of options.

But in Molchanov’s view, ​“Mac vs. Windows is probably a more accurate analogy vis-à-vis EV charging.” While most personal computers today use Microsoft’s Windows operating system, ​“there is also a large and successful ecosystem” for Apple’s macOS operating system.

“In other words, NACS and CCS can coexist just fine,” he said. ​“There is no reason to expect that it will be a zero-sum game.” 

Tesla also has one big reason to make its network available to other EVs, he said — to gain access to billions of dollars of federal funding. The Biden administration is in the midst of disbursing up to $7.5 billion in grants to states and communities to build out EV charging infrastructure, with requirements that the chargers in question meet key criteria, including interoperability.

Under the current policy in place, these rules require any federally funded chargers to include CCS, including Tesla chargers. ​“In other words,” Molchanov said, ​“if Tesla hypothetically tries to play hardball by blocking CCS from its sites, it must wave goodbye to Uncle Sam’s cash — which is unlikely to happen.”

But Nigro proposed another analogy—the eventual coalescence of the IT industry around the Universal Serial Bus (USB) technology to replace the plethora of connector ports that used to festoon personal computers and other devices.

“Thirty years ago, you had one plug for each service,” he said. ​“Now there’s a USB to rule them all. That’s where I think we’re heading for fast charging in North America, at least for NACS.”