Carmakers launch US EV charging network to challenge Tesla
The group includes GM, Stellantis, Hyundai and its Kia affiliate, Honda, BMW and Mercedes-Benz
27 July 2023 - 09:11
byAbhirup Roy and Jarrett Renshaw
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The new joint-venture aims to roll out 30,000 chargers in North America, starting along major highways and in cities.
Picture: REUTERS
Seven major vehicle makers said on Wednesday that they were forming a new company to provide electric-vehicle charging in theUS, in a challenge to Teslaand a bid to take advantage of Biden administration subsidies.
The group includes General Motors (GM), Stellantis, Hyundaiand 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— that according to some lawyers might raise antitrust concerns —said the new joint-venture aimsto roll out 30,000 chargersin North America, starting along major highways and in cities.
The vehicle makers 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.
“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.”
There are more than 30,000 fast-charging machines around the nation.Each can cost anywhere from less than $100,000 to more than $200,000 for the most powerful versions.
Industry executives familiar with the cost of chargers said establishing this venture could cost multiple billions of dollars.
The White House lauded the deal. “We think this is an important step forward,” White House press secretary Karine Jean-Pierre said. “It's creating new union jobs for installation and maintenance.
The Biden administration has set a target of hitting 500,000 chargers by 2030, an almost four-fold increase.
Tesla, which accounted for more than 60% of US EV sales in 2022, has the largest network offast-chargers with almost 18,000 Superchargers.
Tesla said earlier in 2023 that it would open part of that charging network to EVs from rivals to be eligible for a share of funding from $7.5bn in federal subsidies.
Charging leader Tesla
Tesla’s lead in building out a network of chargers has given it sway in setting standards, somethingrivalshave viewed with concern.
GM, Mercedes and others have signed on to adopt Tesla-developing charging technology from 2025.
GM previously said it could save $400m from getting access to Tesla’s network. On Wednesday, it said the new venture was part of its effort to reduce cost and “won’t change GM’s existing commitments or collaborations.”
The other vehicle makers — 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 charging standards but will compete with Tesla’s network.
CEOs of the seven vehicle brands said a charging network built out like fuel stations with restrooms, food service and retail operations would support a faster EV rollout.
Vehicle makers, however, lack the necessary electricians or experience working with retailers, said Andres Pinter, co-CEO at installation and maintenance company Bullet EV Charging Solutions.
“It won't be easy for the automakers to catch up,” he said. “But they do have boatloads of money to throw at the problem and should outsource that work.”
The new venture wouldalso compete against established charging companies, including Volkswagen'sElectrify America and EVGo.
Industry officials said the new venture might be structured similarly to Ionity, which was founded in 2017 in Europe and counts VW, Daimler, BMW, Ford and Hyundai as members.
Asked whether the new venture wouldraise antitrust concerns with, a spokesperson for the group cited the joint statement where the companies said it was subject to regulatory approvals.
The justice department did not respond to a request for comment.
Andre Barlow, an antitrust attorney with Doyle Barlow and Mazard, said the justice department would probably review the deal despite White House support.
A common concern with joint ventures is that a legal collaboration could potentially lead to illegal co-ordination, like price fixing or dividing up markets, he said.
“There are antitrust risks. You have seven car manufacturers that are going to be getting together in terms of this joint venture,” he said.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
NEWS
Carmakers launch US EV charging network to challenge Tesla
The group includes GM, Stellantis, Hyundai and its Kia affiliate, Honda, BMW and Mercedes-Benz
Seven major vehicle makers said on Wednesday that they were forming a new company to provide electric-vehicle charging in the US, in a challenge to Tesla and a bid to take advantage of Biden administration subsidies.
The group includes General Motors (GM), Stellantis, Hyundai 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 — that according to some lawyers might raise antitrust concerns — said the new joint-venture aimsto roll out 30,000 chargers in North America, starting along major highways and in cities.
The vehicle makers 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.
“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.”
There are more than 30,000 fast-charging machines around the nation. Each can cost anywhere from less than $100,000 to more than $200,000 for the most powerful versions.
Industry executives familiar with the cost of chargers said establishing this venture could cost multiple billions of dollars.
The White House lauded the deal. “We think this is an important step forward,” White House press secretary Karine Jean-Pierre said. “It's creating new union jobs for installation and maintenance.
The Biden administration has set a target of hitting 500,000 chargers by 2030, an almost four-fold increase.
Tesla, which accounted for more than 60% of US EV sales in 2022, has the largest network of fast-chargers with almost 18,000 Superchargers.
Tesla said earlier in 2023 that it would open part of that charging network to EVs from rivals to be eligible for a share of funding from $7.5bn in federal subsidies.
Charging leader Tesla
Tesla’s lead in building out a network of chargers has given it sway in setting standards, something rivals have viewed with concern.
GM, Mercedes and others have signed on to adopt Tesla-developing charging technology from 2025.
GM previously said it could save $400m from getting access to Tesla’s network. On Wednesday, it said the new venture was part of its effort to reduce cost and “won’t change GM’s existing commitments or collaborations.”
The other vehicle makers — 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 charging standards but will compete with Tesla’s network.
CEOs of the seven vehicle brands said a charging network built out like fuel stations with restrooms, food service and retail operations would support a faster EV rollout.
Vehicle makers, however, lack the necessary electricians or experience working with retailers, said Andres Pinter, co-CEO at installation and maintenance company Bullet EV Charging Solutions.
“It won't be easy for the automakers to catch up,” he said. “But they do have boatloads of money to throw at the problem and should outsource that work.”
The new venture would also compete against established charging companies, including Volkswagen's Electrify America and EVGo.
Industry officials said the new venture might be structured similarly to Ionity, which was founded in 2017 in Europe and counts VW, Daimler, BMW, Ford and Hyundai as members.
Asked whether the new venture would raise antitrust concerns with, a spokesperson for the group cited the joint statement where the companies said it was subject to regulatory approvals.
The justice department did not respond to a request for comment.
Andre Barlow, an antitrust attorney with Doyle Barlow and Mazard, said the justice department would probably review the deal despite White House support.
A common concern with joint ventures is that a legal collaboration could potentially lead to illegal co-ordination, like price fixing or dividing up markets, he said.
“There are antitrust risks. You have seven car manufacturers that are going to be getting together in terms of this joint venture,” he said.
Reuters
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