Last week Tesla’s entire Supercharger team was reportedly fired in a move that left many bewildered following the successful rollout of its leading EV charger infrastructure. Multiple employees have confirmed their departures from the division which had hundreds of employees and was responsible for designing the chargers and deploying them globally.
Allegedly part of a necessary cost reduction due to competition from less expensive rivals, the news follows announcements by every major EV manufacturer in the US that they will adopt Tesla’s proprietary NACS connector in their new vehicles. So why remove the Supercharger team? Here are our thoughts:
US network operators such as Blink, Chargepoint and Electrify America have all announced plans to offer charging stations that include the NACS connector. If Tesla plans to license the use of this, it would be competing with its customers by continuing to roll out its stations in parallel.
With more than 57,000 charging stations deployed, the cost in maintenance of its charging network is likely to be huge. According to U.S Department of Energy’s Alternative Fuels Data Center EV charger maintenance costs average up to $400 per charger annually for Level 1 and Level 2 chargers and up to $800 for DC fast chargers. This is a potential $45+ million annual cost. However, this is dwarfed by the potential annual return highlighted in a recent article by Bloomberg. Based on an assumption that each Supercharger delivers 200 kilowatt-hours a day and that Tesla collects an average tariff of $0.4 per kW, they estimated returns of $1.74 billion annually. So, covering the cost of maintenance is unlikely to be an issue, though these figures likely don’t take into account the lease or utility costs of each location.
A tweet from Elon Musk states, “Tesla still plans to grow the Supercharger network, just at a slower pace for new locations and more focus on 100% uptime and expansion of existing locations”. This would suggest that Tesla’s isn’t pulling out of the EV charging infrastructure market, but may be reassessing its priorities for investment given the growing competition it faces in its core business of manufacturing EVs.
Tesla’s Supercharger v3 delivers up to 250kW. Given that most vehicles can’t receive power levels close to this whilst fast charging, maybe charging infrastructure innovation isn’t top of Tesla’s priorities for good reason. They can continue to deploy existing Supercharger charging stations without fear of technology becoming obsolete for several years.
It’s unclear what Tesla’s future strategy for EV infrastructure looks like but they have options. Perhaps they will decide they don’t need their own dedicated team for this or that it is cheaper to outsource the installation and maintenance than to keep those costs in-house. Maybe they can sell their chargers to other network operators now that the NACS connector has been widely accepted. The only thing that seems sure right now is that with hundreds of ex-Supercharger team experts available for employment and whilst government funding and incentives for rollout remain, competition in the EV charging station market is likely to get much tougher!
DATAportl’s latest analysis of the global EV charging infrastructure rollout in more than 50 countries can be accessed as part of a subscription or as a one-off report purchase.
The original article is here.