A group of major automakers on Wednesday said they were forming a new company to provide electric vehicle charging in the United States in a challenge to Tesla and a bid to take advantage of Biden administration subsidies.
The group includes General Motors, Stellantis, Hyundai Motor and its Kia affiliate, Honda, BMW and Mercedes Benz, brands representing about half of US vehicle sales but a small share of the EV market dominated by Tesla.
The unusual coalition of competitors said the new joint-venture company would aim to become the leading provider of fast charging in North America with a target of rolling out 30,000 chargers, starting along major highways and in cities.
The automakers did not specify how much they would invest individually or collectively, but said they would be open to additional investment or participation from other companies, including outside the auto industry. A name for the venture was not announced.
Tesla, which accounted for more than 60 percent of US EV sales last year, has the largest current network of fast-chargers with almost 18,000 Superchargers in the United States.
Tesla said earlier this year it would open part of that charging network to EVs from rival brands in order to be eligible for a share of funding from the $7.5 billion (nearly Rs. 61,500 crore) in federal subsidies on offer to expand the use of EVs.
Tesla’s lead in building out a network of chargers has given it sway in setting the standard for how future EVs will connect and power up, something smaller charging companies and other EV makers have viewed with concern.
GM, Mercedes and others have signed on to adopt Tesla-developing charging technology from 2025 to get access to a larger share of its Superchargers.
The other automakers – Stellantis, Hyundai, Honda and BMW – have not committed to the Tesla technology known as the North American Charging Standard (NACS) and have product plans that rely on a rival known as the Combined Charging System (CCS).
The new charging company will support both CCS and the Tesla standard.
“A strong charging network should be available for all – under the same conditions – and be built together with a win-win spirit,” Stellantis CEO Carlos Tavares said in a statement.
In a statement, chief executives of the seven auto brands said a charging network built out like gas stations with restrooms, food service and retail operations would support a faster rollout of EVs, which they said they expected would top 50 percent of US sales by 2030.
The new company would compete against established EV charging companies, including Volkswagen’s Electrify America, ChargePoint and EVGo, which are also looking to accelerate the rollout of chargers with federal funding.
The Biden administration has set a target of hitting 5,00,000 chargers by 2030, an almost four-fold increase.
© Thomson Reuters 2023