Automakers launch US EV charging network to challenge Tesla.

Automakers launch US EV charging network to challenge Tesla.

Seven Major Automakers to Form New Company for Electric Vehicle Charging in the U.S.

Published on July 26, 2022

The race for electric vehicle (EV) dominance continues to heat up as seven major automakers join forces to challenge Tesla and take advantage of the generous subsidies offered by the Biden administration. General Motors, Stellantis, Hyundai Motor and its Kia affiliate, Honda, BMW, and Mercedes Benz have formed an unusual coalition to create a new company focused on providing electric vehicle charging infrastructure in the U.S.

This joint venture, representing brands that account for about half of U.S. vehicle sales but only a small share of the EV market currently dominated by Tesla, aims to roll out 30,000 chargers across North America, starting with major highways and cities.

“The investment will be far less through this partnership than building individual charging networks,” said Akshay Singh, a partner at consultancy PwC Strategy. “They also get to control the customer experience and collect data.”

The move comes as the Biden administration sets a target of reaching 500,000 chargers by 2030, a nearly four-fold increase from current levels. Tesla, the charging leader, currently operates the largest network of fast-chargers in the U.S., with almost 18,000 Superchargers. In order to be eligible for a share of the $7.5 billion in federal subsidies, Tesla has also opened up part of its charging network to EVs from rival companies.

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However, Tesla’s dominance in the charging infrastructure market has raised concerns among its competitors. General Motors, Mercedes, and other automakers have signed agreements to adopt Tesla’s charging technology starting from 2025, with GM stating that it could save $400 million by accessing Tesla’s network.

The new joint venture, however, supports both Tesla’s North American Charging Standard (NACS) and the Combined Charging System (CCS), which rival automakers like Stellantis, Hyundai, Honda, and BMW rely on for their product plans. The company aims to create a charging network similar to gas stations, complete with restrooms, food service, and retail operations, in order to facilitate a faster transition to electric vehicles.

While the joint venture poses a strong challenge to Tesla, it will also face competition from established charging companies such as Volkswagen’s Electrify America and EVGo. The venture may adopt a structure similar to Ionity, a European charging network founded in 2017 by VW, Daimler, BMW, Ford, and Hyundai.

Despite the potential impact of this joint venture, there are concerns about potential antitrust issues. The automakers acknowledge this concern and have stated that the venture will be subject to regulatory approvals. The U.S. Justice Department, which has expressed interest in scrutinizing collaborations among automakers, including joint ventures, is yet to comment on the matter.

André Barlow, antitrust attorney with Doyle Barlow and Mazard, points out that the Justice Department will likely review the deal for any potential illegal coordination between the automakers that could lead to antitrust violations. However, the White House has expressed support for the new venture, citing the creation of new union jobs for installation and maintenance as a positive outcome.

As the electric vehicle market continues to evolve, the formation of this new charging infrastructure company by these major automakers represents a significant step forward. It not only aims to compete with Tesla’s charging network but also supports the Biden administration’s ambitious goals for the growth of electric vehicle infrastructure in the U.S.

Reference: – Reuters. (2022, July 26). Seven automakers form U.S. electric vehicle charging venture. Retrieved from Reuters website

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