Tesla Capitalizing On Industry’s EV Transformation

There is no doubt about it, the automotive industry is transitioning to electrified mobility. According to the forecasting experts at AutoForcast Solutions, by 2030, there will be 138 Battery Electric Vehicle (BEV) nameplates being built in North America, with about 45 million BEVs on the road.

However, the industry still faces challenges for mass adoption, and one big issue is charging infrastructure. According to a study conducted by EY, to accelerate the adoption of EVs in the US, over 400,000 public charge points are needed by 2025, with that number rising to over 1.1 million in 2030. Today, there are approximately 160,000 EV charging stations in the U.S. and significantly fewer fast charging locations.

It seems that Tesla
TSLA
had the foresight to understand the need for a robust and fast charging network more than 10 years ago when it started and invested heavily in the North American Charging Standard (NACS). Today the company’s Supercharges account for about 60% of the total of fast chargers in the U.S. and Canada, according to the U.S. Department of Energy.

Industry observers seemed surprised that Ford, GM, Rivian and, now Volvo, abandoned the Combined Charging System (CCS) port that was agreed to by numerous global automakers in 2012 and brokered deals with Tesla for access to its robust charging network.

The fact is that Tesla is about 10-12 years ahead of the rest of the industry. They are disruptors – creating new manufacturing techniques, providing limited trim models, positioning software oftentimes ahead of hardware and creating their own fast-charging port to roll out across the country to satisfy the needs of their consumers.

Tesla, GM, Ford and Rivian account for more than 70% of U.S. sales and they feel access to fast-charging EV stations is a barrier to wider consumer adoption of the vehicles they are pouring billions of dollars to create. By combining forces, these companies may be able to achieve the level of charging stations need for mass consumption. Deals like this further support the notion that BEVs are not a fad like many might think. Electrified mobility will continue to evolve and will play a critical role in the automotive industry’s future.

However, it is too early to tell if other automakers will look to make similar agreements with Tesla or how other CCS charging networks like Electrify America or EVgo will respond, but it is clear that Tesla is the winner here. The company continues to find a way to generate revenue beyond selling vehicles – first by selling carbon credits to other automakers, generating $1.7 billion in 2022 alone – and now by selling access to their charging network.