Seven months ago, when Tesla announced it would share its EV charging connector design to encourage automakers to adopt the technology and help make it the new standard in North America, few, if any, predicted competitors would bite.
Now, with Ford and General Motors agreeing to integrate Tesla charging tech in their next-gen vehicles by 2025, the EV industry is suddenly on the cusp of a shift that could splinter the market.
“These announcements with Ford and GM solidify that there will continue to be a standards war for a decade,” Arcady Sosinov, founder and CEO of fast-charging startup FreeWire Technologies, told TechCrunch+. “NACS (Tesla’s standard) is a better experience, and more OEMs, we believe, will converge on it.”
Most electric vehicles in the U.S., with the exception of Tesla, use the Combined Charging System, an internationally recognized charging standard developed by a consortium of automotive manufacturers, including Ford, Volkswagen and Daimler. Tesla went a different direction and developed a charging ecosystem (dubbed the North American Charging Standard, or NACS) that includes the charging port and connector. Tesla also built out a network of thousands of fast chargers called Superchargers, which are only accessible to vehicles with the NACS standard.
CCS has been the go-to standard for automakers. However, the quality of Tesla’s charging system — from the size and weight of the charging cables to the quality of the Supercharging stations to the ease of payment — has helped propel the automaker to become the No. 1 seller of EVs.
“Ford and GM are saying they can’t wait any longer,” Sosinov said. “They can’t put their success in the hands of these charging networks that are just not doing it, and that’s a really big statement to make and should be a shot across the bow at folks like the Electrify Americas and the EVgos.”
Tesla is poised to make 7,500 Superchargers available to non-Teslas by 2024, according to a statement from the White House, but it’s not clear whether Ford’s and GM’s alignments with Tesla have changed those plans.
Opening Tesla Superchargers to Ford, GM and possibly other automakers also gives Tesla guaranteed utilization on its infrastructure. But that comes with its own challenges. Tesla Superchargers located along corridors in California and parts of the East Coast are already crowded with Teslas.
Charging isn’t a high-margin business for Tesla. The automaker’s revenue from “services and other,” which includes Supercharging along with Tesla servicing and parts and used car sales, came to $1.8 billion in the first quarter. The cost of that revenue was $1.7 billion. But getting more use out of existing chargers could help Tesla fund the deployment of even more infrastructure, thus fracturing the industry further.
A two-standard system
The EV charging industry is a nascent one, and while CCS advocates might bemoan the premature demise of a standardized charging protocol, the fact remains that we’re already living in a two-standard system. At least in the United States.
Globally, there are 81,000 DC fast chargers using the CCS standard, compared to 45,000 Tesla Superchargers using NACS. In the U.S., however, those numbers are almost equal: 22,262 CCS connectors compared to 22,128 Tesla Superchargers, according to recent PlugShare data.
While NACS might be a better system overall, CCS isn’t going away. In Europe, CCS is a requirement, and Tesla has had to fall in line. The U.S. hasn’t prohibited the deployment of NACS chargers. However, it has given CCS a boost by providing up to $7.5 billion in incentives to build out publicly available CCS chargers. It’s unclear if GM’s and Ford’s alignments with Tesla will affect those incentives.
Plenty of automakers and EV charging companies are already in too deep with CCS to make the switch, according to Charly Mwangi, a partner at Eclipse and a former Rivian and Tesla executive. Mwangi said he doesn’t think Rivian will adopt NACS after developing its own CCS-based charging network. Similarly, Volkswagen isn’t expected to make the shift, either. The automaker was forced to spend $2 billion on Electrify America, a U.S. EV charging network, after its 2016 diesel emissions settlement. A year ago, VW and Siemens put another $450 million into Electrify America and its many CCS ports.
Mwangi does think that standardization is the best thing for the industry, but he says it’s OK to have two standards. “What I hope is we stick with a maximum of two solutions, like we standardize as a group,” Mwangi told TechCrunch+. “Like iOS and Android, right? Some people will go the iOS route, which is what I would call the Tesla version. And then you have CCS, which is more the Android version.”
Better or worse for EV owners?
In direct response to the Ford and Tesla news, FreeWire said it would begin adding NACS connectors to its network by mid-2024. The company currently has 1,100 CCS ports throughout the country, and it will now build 1,250 dual stations that can accommodate both CCS and NACS connectors, a trend that Sosinov expects to see retailers like Walmart and McDonald’s follow rather than picking a side.
But unless everyone decides to accommodate both CCS and NACS — Tesla included — it will end up falling to the consumer to purchase adapters and keep them in their cars, which is an added cost and less user friendly.
CharIN, a global association founded to promote the adoption of CCS, says the use of adapters could lead to poor handling and increased damage of charging equipment and potential safety issues. In a statement condemning the Tesla-Ford partnership, CharIN said that diverging from the CCS standard will hamper the global EV industry’s ability to thrive.
“CCS is the global standard and therefore focuses on international interoperability and, unlike NACS, is future-proofed to support many other use cases beyond public DC fast charging,” reads a statement from CharIN.
CharIN also argues that announcements like the one from Ford and Tesla could create uncertainty and “lead to investment obstacles” that will delay EV adoption.
Ford countered that such partnerships actually increase access to public fast-charging, which should support the rapid adoption of EVs.
“Equipping future Ford EVs with NACS will improve the overall charging experience for our customers, and the NACS-to-CCS and CCS-to-NACS adapters will offer our customers access to chargers with both connector types,” Martin Günsberg, a spokesperson for Ford, told TechCrunch+.
Carter Li, CEO of SWTCH, an EV-charging solutions provider, agreed with this point, adding that the partnerships should help meet evolving charging needs and create a more scalable and robust infrastructure.
“Employing EV chargers and networks with open standards ensures a more flexible and accessible infrastructure that supports the EV revolution,” Li said. “It’s critical to maintain the availability of the CCS plug to provide wide access to EV charging.”
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