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

And imagine if EV charging eventually follows the gas station model.

A row of Tesla chargers in the dark.

Image via unsplash/Prometheus

The news that rocked the electric transportation world earlier this month — General Motors’ deal to give its drivers access to the Tesla Supercharger network — is no doubt a big turning point for EVs in the U.S. It followed an identical deal in May between Ford and Tesla. Earlier this week, Rivian said its customers could access Tesla’s charging network starting in 2024. Together, these pacts could have serious ripple effects for the development of the charging network across the country.

But they also generate a lot more questions than answers. Will these partnerships create a standards war between types of EV chargers? And will that hurt or help consumers? Experts don’t agree on that point, and they make varying predictions for what this news portends. It could usher in a new model for charging akin to gas stations, or it could be little more than a blip for drivers who will simply end up with a lot more charging options.

"I think 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 electric transportation advocacy group. "It’s creating more options for folks to charge, for one thing. And it is also going to push everybody to up their game in terms of reliability and customer experience."

That’s because Tesla’s proprietary charging network is largely viewed as 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 the most part.

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

This distinction has been a big point of contention in the aftermath of the Ford and GM news, with some asking if this crowns NACS as the de facto nationwide charging standard. But it’s far too early to make such a prediction, according to Allen, who has spent more than a decade in 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. car is the Nissan Leaf. He thinks of NACS versus CCS in the way that many people think about Mac versus PC computers, each of which have a base of hardcore followers. "We peacefully coexist for the most part," he said.

Allen doesn’t see any reason why charging operators won’t simply embrace both NACS and CCS, rather than choosing a side. The federal government’s $7.5 billion program to build out charging infrastructure is already behind CCS, and he predicts policy might eventually embrace dual-standard chargers, but finds it unlikely that the government will support NACS-only charging. "Really, it's not that hard to put two cables on the box," he said. (Indeed, the White House followed the Ford and GM news with its own announcement: Federal funds would become available for NACS chargers as long as they include a CCS cable as well).

Plus, a number of charging companies, in the wake of this Tesla news, have already announced they will add NACS capabilities to chargers that previously only offered CCS.

Is this war?

One of those companies is FreeWire Technologies, which made its move 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 continue, but NACS will continue as well. And we’re looking at the next 10 years of standards wars battling out, and that’s never a good thing for consumers."

Sosinov said he would have preferred only one standard, even if it was suboptimal, because having multiple standards and types of chargers drives up costs for everyone.

But Allen argues that the difference in charging standards just doesn’t have that much consequence for consumers. "I think it will be really interesting for those of us who are EV nerds to watch how this evolves," he said. "But I don’t think it’s something that the average driver really needs to worry about too much."

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 next partner.)

Tim Abbott, vice president of corporate strategy at Hertz, is a big proponent of more partnerships in the EV charging arena. He helps lead the electrification of the rental car giant’s fleet, which so far 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 car company’s journey toward electrification has so far involved partnerships with automakers, city governments and charging companies. 

Abbott said Hertz is aiming to electrify its entire fleet of 100,000 consumer rental vehicles by 2024 — educating customers and supporting charging infrastructure along the way. The new Tesla partnerships with Ford and GM might weigh in the balance for future vehicle purchases, Abbott said, but he noted those decisions are dictated by customer needs more than anything else. "Our goal is to have an electric vehicle for anybody, for any use case," he said.

If they build 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 build out their own charging systems in the way that Tesla has. What started as automakers’ optimistic bet on public charging networks quickly flourishing has turned into a disadvantage in the market.

"Their historical decision to not build a charging network looks really bad," Sosinov said of most U.S. automakers. "And it ultimately hurt car 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 if you don’t have the charging?"

The Tesla partnerships also have the potential to shape how public charging is funded and built in a broader sense, Sosinov said. Currently, major charging installers such as EVGo depend 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 store.

"If charging infrastructure becomes more and more ubiquitous, the electrons become less scarce, and those 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 supply of electrons." 

And if that depresses the prices 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 store. The ultimate result could position retailers such as Walmart as the more natural owners of charging infrastructure, using it as a means to draw people into the store, he added.

His company’s chargers — which combine charging stations with large batteries to reduce strain on the electrical grid — are located mostly at BP, Chevron and RaceTrac gas stations that already lean into this model. "That’s where America goes to buy stuff, and that’s where they’re probably going to go to charge," Sosinov said.

Editor’s note: This article has been updated to include Rivian’s deal with Tesla.

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