Major automakers take on Tesla with US-wide EV charging network

The U.S. needs far more fast-charging stations for electric vehicles. Now seven of the world’s largest automakers are joining forces to increase their numbers on U.S. highways and at other public charging sites.

BMW Group, General Motors, Honda, Hyundai, Kia, Mercedes-Benz Group and Stellantis NV announced Wednesday that they’ll form a joint venture to ​“significantly expand access to high-powered charging in North America.” The companies promised ​“at least 30,000 high-powered charge points in urban and highway locations.”

That would nearly double the roughly 32,000 fast-charging outlets now deployed across the U.S. as of July 2023, according to the U.S. Department of Energy. The automakers said the first stations are expected to open in the U.S. in summer 2024 and in Canada at a later date.

Details on the joint venture are sparse. It has no name yet, and the automakers involved said that its creation this year remains subject to closing conditions and regulatory approval. 

But the automakers noted that the country’s existing fast-charging network remains woefully insufficient to support the millions of EVs likely to hit U.S. roads in the coming years. 

Analysts predict that the U.S. will need between 500,000 and 1.2 million public charging ports by 2030 to meet the Biden administration’s goal for EVs to make up half of all U.S. car sales by the end of the decade. Most of those will be Level 2 charging ports, which take hours to charge an EV battery.

But fast chargers capable of filling up a passenger EV’s battery in about half an hour to an hour are seen as vital to providing drivers with the confidence that they’ll be able to take long trips in EVs without onerous wait times at public charging sites. DOE’s National Renewable Energy Laboratory estimates that the U.S. will need 182,000 fast chargers to support between 30 million and 42 million EVs on the road by 2030.

Government funding can make up only a small portion of the total cost of deploying this network, experts say. In that light, environmental and climate activists welcomed the announcement as an important step in enabling the nation’s shift to electric-powered vehicles — a key element of cutting carbon emissions from transportation.

“This joint venture is a major win as we accelerate the electric vehicle transition,” Sierra Club’s Clean Transportation for All Director Katherine García said in a statement. ​“We welcome the effort and urge the automakers to fulfill this commitment to making the EV charging experience better and faster for drivers across the country.”

Competing fast-charging networks and technologies 

The seven automakers also pledged that the chargers deployed by the joint venture would be ​“accessible to all EV customers, offering both Combined Charging System (CCS) and North American Charging Standard (NACS) connectors.” Those are the two main technologies for connecting high-voltage charging to EVs, the first developed by an industry consortium and the second by EV and fast-charging leader Tesla.

Ford and General Motors made waves earlier this year when they announced plans to make future EV models compatible with Tesla’s NACS system, which has until recently been usable only by Tesla vehicles. Tesla’s Supercharger network has about 20,000 charging plugs, more than twice the fast-charging stations available from all other providers in the U.S. combined.

Tesla’s network has also earned higher marks for reliability and ease of use than other charging sites, which have received some negative reviews from customers and independent groups like J.D. Power. Wednesday’s announcement highlighted the seven automakers’ commitment to providing a ​“best-in-class charging experience” with the new network.

“GM’s commitment to an all-electric future is focused not only on delivering EVs our customers love, but investing in charging and working across the industry to make it more accessible,” GM CEO Mary Barra said in Wednesday’s statement. ​“The better experience people have, the faster EV adoption will grow.” 

The automakers also stated that the charging sites to be deployed ​“are expected to meet or exceed the spirit and requirements of the U.S. National Electric Vehicle Infrastructure (NEVI) program.” That’s the $7.5 billion federal funding program created by the infrastructure law passed by Congress in 2021, which will provide $5 billion in grants to states for highway and transportation corridor charging deployments and another $2.5 billion for community charging projects.

Hawaii and Ohio are among the earliest states to release plans for spending NEVI money, and a few other states have theirs forthcoming. But the number of chargers under those plans remains relatively small, and the entire program is expected to run through the end of the decade.

To meet NEVI standards, charging sites need to use EV chargers made in the U.S., noted Graham Price, senior equity research associate at Raymond James & Associates. Only a few fast-charging manufacturers have announced U.S.-based manufacturing, including Tritium, ABB and SK Signet, with a combined production capacity of about 50,000 chargers per year, he said.

Wednesday’s statement also left unclear whether the participating automakers plan to develop a stand-alone joint venture to finance, site, construct and operate the fast chargers they will deploy or whether they might seek out partners to handle these various aspects.

That could matter greatly to the existing roster of public-charging companies that could end up being either competitors to or partners with the new joint venture, Price pointed out. It’s particularly important given that today’s fast-charging networks lose more money than they earn and are expected to do so for years to come.

None of the major U.S. publicly traded public-charging providers — EVgo, ChargePoint and Blink — are projecting to earn a profit from their networks before the middle of this decade, Price said. Even Tesla’s Supercharger network is a ​“loss leader, or breakeven at best, to support its core sales.”

It’s highly likely that the new joint venture is similarly aimed at supporting automakers’ EV sales rather than any ​“expectations of it turning a profit in the near future,” he added. 

Price also highlighted the notable absence of Volkswagen, the company that owns Electrify America, from the list of automakers supporting the joint venture. The company’s network of more than 3,500 predominantly CCS-based charging points in the U.S. is funded by Volkswagen’s $2 billion Dieselgate settlement agreement with the U.S. government in 2016, and a new fast-charging network supported by rival automakers could pose a threat.

At the same time, some industry observers see this move by automakers as seeking to counter Tesla’s ongoing domination of the U.S. fast-charging market.

“The industry wants a counterweight to Tesla,” Nick Nigro, founder of Atlas Public Policy, wrote in a Wednesday LinkedIn post. Tesla’s dominant position in the market threatens to make automakers beholden to its chosen technology, he noted.

​“For a long time, the [automakers] sat on the sidelines in the U.S. expecting charging providers, utilities, and government to fund the vast majority of charger deployments,” with Tesla being the exception, Nigro wrote. ​“They are no longer on the sidelines.”