Speaker 1: This is Dana Perkins and you're listening to Switched on
Speaker 1: the BNEF podcast. When it comes to public electric vehicle chargers,
Speaker 1: the US has nearly one hundred and fifty eight thousand
Speaker 1: in the whole country. Now, this might seem like a
Speaker 1: big figure, but when you set it against Europe's six
Speaker 1: hundred and ninety three thousand and China's colossal two point
Speaker 1: one million, well then you start to realize the scale
Speaker 1: of the task that lies ahead as the US readies
Speaker 1: itself for the upcoming electric vehicle era of transport. So
Speaker 1: looking back, in twenty twenty one, the Biden administration announced
Speaker 1: the National Electric Vehicle Infrastructure Formula Program or NEV for short.
Speaker 1: They had the intention of aiding the installation of charging infrastructure,
Speaker 1: which would be required for the mass rollout of electric
Speaker 1: vehicles across the States. However, complicating matters in the US
Speaker 1: included the charging network itself. It's a patchwork quilt of
Speaker 1: different entities competing against one another, and at the heart
Speaker 1: of the battle has been an issue around whether your
Speaker 1: vehicle is compatible either with the Combined Charging System or
Speaker 1: CCS can not, or Tesla's own North American Charging Standard
Speaker 1: equivalent now. Tesla was early in its national role out
Speaker 1: of charging stations in ultrafast chargers, so it became a
Speaker 1: dominant player. But with other electric vehicle brands now gaining
Speaker 1: in popularity, this begs the question can anyone compete with
Speaker 1: Tesla's charging network or will they have to join them?
Speaker 1: To find out more, on today's episode, I speak with
Speaker 1: beanuf's head of electric vehicle charging, Ryan Fisher, as well
Speaker 1: as a senior associate on our EV team, Corey Kanter.
Speaker 1: The topics that we discuss include the number of fast
Speaker 1: and slow chargers across a variety of different US charging networks,
Speaker 1: who owns them, their failings and also their successes, and
Speaker 1: the subsidies on offer at the federal level as a
Speaker 1: part of the Nevy scheme. And lastly, Tesla's competitors and
Speaker 1: whether anyone can actually really challenge them or will their
Speaker 1: rivals need to accept the North American charging standard as
Speaker 1: the national standard. As always, if you like this podcast,
Speaker 1: if you subscribe, you're going to receive updates on future episodes,
Speaker 1: and if you give us a review, it'll make us
Speaker 1: more discoverable by others. But right now, let's jump into
Speaker 1: our conversation with Ryan and Corey. Corey thank you for joining.
Speaker 2: The show today, Thanks Dana, happy to be.
Speaker 1: Here, and Ryan, thank you for being here.
Speaker 3: Thanks Diana.
Speaker 1: So we're going to talk about charging networks, specifically in
Speaker 1: the United States, where there's a lot of activity going
Speaker 1: on at the moment. So can you first explain what
Speaker 1: the NEVY is and then let's get into what that
Speaker 1: means for charging in the US.
Speaker 3: So, yeah, it's seven point five billion of funds from
Speaker 3: the government, split into two main funds, five billion for
Speaker 3: highway largely highways fast charging, and then another two point
Speaker 3: five billion for initiatives in other areas called the Discretionary Grant.
Speaker 3: Some more details on that to come.
Speaker 2: And to add to Ryan's point, the NEVY funding in
Speaker 2: the kind of five billion dollar pot is controlled a
Speaker 2: lot by the state, and so they've already begun setting
Speaker 2: out their plans and we're beginning to see the early
Speaker 2: stages of charging companies actually be selected by state, so
Speaker 2: Ohio and May and there are two examples. And so
Speaker 2: even though the infrastructure law that began the funding of
Speaker 2: the NEVY program passed almost two years ago, as of
Speaker 2: this November, we haven't really seen any chargers built out
Speaker 2: yet so there's still a lot of work to do.
Speaker 1: So before we get into any source of details about
Speaker 1: what we think will have in for the future of
Speaker 1: charging networks in the US, because there is so much
Speaker 1: focus on this at the moment, let's talk about the
Speaker 1: current state of play. So what does the existing charging
Speaker 1: infrastructure look like in the US, and you know what
Speaker 1: companies dominate it?
Speaker 3: Yeah, So the infrastructure in the US, I think there's
Speaker 3: around one hundred and fifty hundred and sixty thousand connections. Now,
Speaker 3: if you think about this kind of fast versus slow charging,
Speaker 3: I want to take an hours, am I taking minutes
Speaker 3: to charge? Something like one hundred and twenty five thousands
Speaker 3: or thirty five thousand split. California maybe unsurprisingly dominate in
Speaker 3: terms of the total states. I think New York is second,
Speaker 3: but quite far behind. In terms of the company, Teslar
Speaker 3: is kind of the key one out there installing, spending
Speaker 3: the money putting in that fast infrastructure. And obviously we've
Speaker 3: heard a lot about the deals with the other auto
Speaker 3: makers and I'm sure we'll talk about that later today.
Speaker 3: And then you've got others EVgo also putting in charges.
Speaker 3: Electrify America, who's funded by VW and then Chardpoint, who
Speaker 3: is kind of this weird mix in that they're selling
Speaker 3: the hardware and the software but they're not ultimately the
Speaker 3: operators of that infrastructure. But many other examples, but they're
Speaker 3: the big ones.
Speaker 1: So Corey, maybe you could shed some light on what
Speaker 1: the current state of play is in California from a
Speaker 1: charging standpoint.
Speaker 2: Yeah, I mean, in terms of California specifically, what's interesting
Speaker 2: is the fact that it's a fairly robust EV ecosystem.
Speaker 2: For listeners of the show, to give you a sense,
Speaker 2: California in the first half of this year saw about
Speaker 2: a twenty five percent nearly one in four vehicles sold
Speaker 2: as electric, and so at BNF when we talk about
Speaker 2: electric vehicles, we're talking battery, electric and plug and how
Speaker 2: productric vehicles. California has about one third of all of
Speaker 2: the electric vehicle chargers public charging connectors built as of
Speaker 2: the end of twenty twenty two. I've been working recently
Speaker 2: on a piece that folks should expect to see sometime
Speaker 2: this month around different EV state markets, and California actually
Speaker 2: looks quite good in terms of EV's per charging connector,
Speaker 2: around twenty seven to twenty eight or so and so
Speaker 2: it's not perfect. California has its own challenges to deal
Speaker 2: with in terms of the grid and in terms of
Speaker 2: ensuring that higher level of EV adoption can coexist with
Speaker 2: a grid that's fairly reliable on renewable energy. But they
Speaker 2: have a robust charging build out, including a state sponsor
Speaker 2: of charging infrastructure, and they're even thinking ahead about what
Speaker 2: the NEV program means for them. So one thing that
Speaker 2: California does that's interesting with NEV is at the kind
Speaker 2: of national level. NEV has a minimum requirement of one
Speaker 2: hundred and fifty kilowatts for many of their highway fast chargers.
Speaker 2: California is even looking at some sites where they're going
Speaker 2: to require three hundred and fifty kilowatts for high volume
Speaker 2: EV charging sites. So California, just like any country, has
Speaker 2: its challenges, but they've been fairly robuts with their EV
Speaker 2: charging build out.
Speaker 3: The other thing about California we dicussed this when I
Speaker 3: was on the podcast with Jay last time, but is
Speaker 3: the Low Carbon Fuel Standard. The LCFS basically credits deficits
Speaker 3: built by the kind of oil and gas majors having
Speaker 3: to then buy them off people who saw low carbon fuels.
Speaker 3: So if you're producing or selling electricity for charging, you
Speaker 3: basically can generate these credits and they are about ten
Speaker 3: percent of revenues for some of these charging companies, which
Speaker 3: kind of is cyclical, and then people were more likely
Speaker 3: to build infrastructure, so kind of plays into why California
Speaker 3: house more charges.
Speaker 1: So when we think about these chargers, are the new
Speaker 1: ones going in, are they largely superchargers or is there
Speaker 1: an even split between these slower versus much quicker charging stations.
Speaker 3: When you look most of the markets, you really see
Speaker 3: percentage wise, it's kind of eighty percent the slower chargers
Speaker 3: on a total number basis. If you then start to
Speaker 3: look at investment or the number of electrons that are
Speaker 3: being delivered from the chargers, it's really these fast and
Speaker 3: more powerful ones that are taking the line share of
Speaker 3: money and just cotributing electricity.
Speaker 1: And we're talking specifically about public chargers at the slow range,
Speaker 1: not in people's homes as they're setting them up directly
Speaker 1: in their home after they've bought an electric vehicle.
Speaker 3: Yeah, that's right, So they could be anywhere. Golf courses
Speaker 3: might have slow charges, hotels, these kind of destinations. But
Speaker 3: more so when you think shopping centers were competing for
Speaker 3: slow chargers. Now actually people are realizing, well, fast chargers
Speaker 3: are also suitable there. We're seeing more competition. Walmart is
Speaker 3: now getting in the game themselves, so.
Speaker 1: They've recognized that essentially, if you're staying at a hotel,
Speaker 1: you're more than likely to stay overnight and you have
Speaker 1: enough time to get a charge, whereas if you're going
Speaker 1: to Walmart, you may not be spending your entire day there.
Speaker 3: Yeah, exactly, and you kind of want to come out
Speaker 3: and have your car full. So even though there was
Speaker 3: this thing of oh, we'll have slow so people stay
Speaker 3: in the store forever, like, there's a limit to how
Speaker 3: long people probably want to stay in the in the store.
Speaker 3: And I think that forty five minutes. With the battery
Speaker 3: sizes we've got today on one hundred and fifty kilo,
Speaker 3: what charge, which is kind of in that fast range,
Speaker 3: would go from zero to eighteen ninety percent.
Speaker 1: I mean, Corey and I both have these recent EXPERI
Speaker 1: variances where we've rented Tesla's actually in different states. So Corey,
Speaker 1: where were you when you rented your Tesla?
Speaker 2: Yeah, my girlfriend and I were at a wedding in California,
Speaker 2: and it felt like the perfect opportunity to rent an
Speaker 2: EV given how many chargers again are in California. So
Speaker 2: we rented the Tesla Model three and when we're staying
Speaker 2: at a hotel that advertised free charging. Unfortunately, Dana, that charger,
Speaker 2: while offered and advertised, was so good that other people
Speaker 2: were using it for pretty much the entire time that
Speaker 2: we were there, So we ended up useeing fast charging
Speaker 2: as a part of Tesla's supercharging network. But again, it
Speaker 2: is a nice perk. I wish the hotel had more chargers.
Speaker 1: So I rented Tesla why in Massachusetts and ended up
Speaker 1: using it for three weeks across Massachusetts, New York State,
Speaker 1: and Rhode Island and did a bit of a road
Speaker 1: trip around there. And was definitely the stereotypical supercharger. Well
Speaker 1: the person that they're looking for, which essentially pulls into
Speaker 1: the parking lot, charges the car, and probably goes into
Speaker 1: every store that's in that particular parking lot they were at.
Speaker 1: But the more important thing was that we exclusively use
Speaker 1: Tesla superchargers, and I am very interested to learn that
Speaker 1: those superchargers are actually now open to a number of
Speaker 1: other different types of car owners. Let's delve into that
Speaker 1: a little bit. What other companies now have access to
Speaker 1: Tesla superchargers in the US.
Speaker 3: Oh, there's quite a few signed up, and it almost
Speaker 3: makes it seem like a landslide win that everybody's going
Speaker 3: to Tesla. So gm Ford were the first two, Mercedes
Speaker 3: Is on their Rivian, Fiska, Volvo. The list goes on.
Speaker 3: I think what's important is who's not on there, so Stalantis, Toyota, BMW,
Speaker 3: High on Ikea. There's still some big hitters who have
Speaker 3: not quite signed up yet, and they, whilst accounting for
Speaker 3: maybe a small percent of EV sales, account for a
Speaker 3: lot of car sales. So let's say some of their
Speaker 3: strategy about how many evs they're going to sell comes true.
Speaker 3: Then they're still splitting from Tesla and maybe being a
Speaker 3: bit aware of the dominance and the strategic win that
Speaker 3: they may hand by signing up with them.
Speaker 2: Connect Okay, at one point, Ryan, and to just about
Speaker 2: the Tesla dominance. So Tesla has rebranded its supercharging connector
Speaker 2: as next the North American Charging Standard as an effort
Speaker 2: to sort of broad in the reach of the network
Speaker 2: and position themselves really as the leading charging connector type
Speaker 2: here in the US and Canada. There's one stat you
Speaker 2: use in a lot of your presentations that I really
Speaker 2: appreciate because I think it really illustrates how much dominance
Speaker 2: Tesla actually has. It was the installation of new superchargers
Speaker 2: last year, which I believe was around like three thousand
Speaker 2: or so, and these other networks are more, I think
Speaker 2: in the five hundred or so range in terms of
Speaker 2: new installations. And so there's a reason why these automakers
Speaker 2: have been unhappy with some of the charging build out
Speaker 2: to date, and I think that the numbers show it.
Speaker 2: But also all of these announcements you just highlighted Ryan
Speaker 2: really drive the point that it's not necessarily that everyone
Speaker 2: wants to kind of jump on board with Tesla. It's
Speaker 2: just they're so far out ahead of the competition over
Speaker 2: here in the US that really the ev charging story
Speaker 2: in the US is Tesla and then there's everyone else.
Speaker 3: Yeah, And like anecdotal stories are sometimes the best. And
Speaker 3: I was kind of sat on my sofa and I
Speaker 3: don't usually have Twitter, but a Twitter spaces pops up
Speaker 3: and it's Mary Barrow and it's Elon Musk, and I'm thinking, like,
Speaker 3: what is this, it's got to be some kind of
Speaker 3: big announcement. And this comes on the back of Tesla
Speaker 3: buying Twitter, GM not going on Twitter at all for
Speaker 3: like seven eight months as the first time. They've never
Speaker 3: posted anything in the whole time. And GM is maybe
Speaker 3: the typical corporate car manufacturer, very organized, very explicit about
Speaker 3: what they're doing. I'm pretty sure Elon Musk was in
Speaker 3: his car. You could almost sound like you could hear
Speaker 3: a child in the back seat muffling around, and it
Speaker 3: was just so casual. So this massive strategic shift for GM.
Speaker 3: It just showed that they were almost having to bow
Speaker 3: down to Tesla, and surely they didn't want to do it,
Speaker 3: but they just noticed all of the importance that was
Speaker 3: in it, and that setting did show that they really
Speaker 3: needed it. And Musk maybe was lauding it up a
Speaker 3: little bit.
Speaker 1: And then Ford actually followed the very similar trajectories GM.
Speaker 1: I guess they predated it. So when did Ford sign
Speaker 1: on for this charging network?
Speaker 3: I think Ford was a little bit earlier, maybe two
Speaker 3: three weeks earlier, and you could almost a bit of
Speaker 3: a scramble really for GM to sign up. And I
Speaker 3: think that falls through when you think about some of
Speaker 3: the things the issues that may be caused by this.
Speaker 3: You've got multiple connectors now in the US, some people
Speaker 3: using CCS, some people using Tesla's. If I'm buying a car,
Speaker 3: do i want to buy a car knowing that I'm
Speaker 3: going to have an adapter when I go to a
Speaker 3: different network. There's a reason why you don't want to
Speaker 3: have these because they could be unsafe. Like you clip
Speaker 3: it in and you can largely if it's the automaker
Speaker 3: manufactured one not on clip it while you're charging. You're
Speaker 3: not going to get an electric shot. But if you
Speaker 3: buy one of the cheap ones online, it doesn't have
Speaker 3: the safety catch and somebody might get electrocuted. So there's
Speaker 3: all of these things coming out of it that are
Speaker 3: just not not exactly ideal. So it isn't like a
Speaker 3: straight switch. Some of these are saying we're going to
Speaker 3: adopt this in two years on our vehicles, So it
Speaker 3: doesn't give the best gloss for the OEMs.
Speaker 1: Now you mentioned CCS, No, Ryan, this just shows me
Speaker 1: that you have been working in the electric Vehicle team
Speaker 1: for a very very long time because CCS means something
Speaker 1: a little different to many of us at BNEF. What
Speaker 1: does CCS mean to you in this car text?
Speaker 3: So I think the acronym is combined charging system. But
Speaker 3: essentially you can think of it if you go from
Speaker 3: a europe or to the US, or US to Europe.
Speaker 3: It's just a slightly different connector standard in terms of
Speaker 3: how the pins look and then maybe some of the
Speaker 3: actual software and communications behind it. So moving over to Tesla,
Speaker 3: once it works perfectly today you plug a Tesla into
Speaker 3: a Tesla supercharger. If you actually with one of these
Speaker 3: other OEMs, there isn't any real guarantee that it's going
Speaker 3: to fully work. Are they going to be able to
Speaker 3: implement it the same? Are they going to want to
Speaker 3: implement it the same? So the problem for the other
Speaker 3: OEMs is you buy a Volkswagon and you go and
Speaker 3: charge somewhere it doesn't work. It's because everybody's using the
Speaker 3: same thing. They maybe not implemented the standard correctly, or
Speaker 3: they've all implemented it slightly different. And whilst the gloss
Speaker 3: of what Tesla is doing is there and like this
Speaker 3: ultimate oh, it's going to be the same pinnacle, the
Speaker 3: same experience. I have to admit there's a bit of
Speaker 3: pessimism from me as to whether that will actually be
Speaker 3: the case when these other charge manufacturers go And Corey
Speaker 3: was maybe more in the detail on this, but there's
Speaker 3: a series on Charge TV, which is like a magazine.
Speaker 3: Somebody's gone out and they're discussing four part series on
Speaker 3: this experience. They've gone out and they've interviewed a lot
Speaker 3: of people, and when you look in some of those details,
Speaker 3: it almost seemed like top down they decided at exec level,
Speaker 3: we're going to move to the Tesla charging connector, and
Speaker 3: some of the engineers maybe didn't quite know. And nobody's
Speaker 3: going to come out and say that full well, but
Speaker 3: that there was like a little bit of that appearing
Speaker 3: in the text and the sentiment of those articles.
Speaker 1: Well, because this is why I keep harping on about
Speaker 1: when the dates were that these agreements were made, and
Speaker 1: GM and Ford were fairly recent, but perhaps the other
Speaker 1: companies were quite a bit before that. And then I mean,
Speaker 1: maybe you can answer that question for me, because the
Speaker 1: reason I am fixated on is the fact that I
Speaker 1: did not see anything other than a Tesla on a
Speaker 1: Tesla supercharger, and trust me, I went to quite a
Speaker 1: few of them over the course of three weeks and
Speaker 1: I'm thinking maybe the owners of these other cars just
Speaker 1: don't know, or as you're inferring, maybe the experience isn't
Speaker 1: as seamless as we might think it will be.
Speaker 3: Oh, so it was Ford was first. I must have
Speaker 3: been May, mid May, back end of May. That then
Speaker 3: GM in the June, I think, and then all of
Speaker 3: these other ones then followed over the preceding weeks.
Speaker 1: So this is really extremely recent.
Speaker 3: Yeah, extremely recent. So none of these are the cars.
Speaker 3: They've all still got the CCS connector. There's probably no
Speaker 3: adapters that you can buy yet, so they physically probably
Speaker 3: can't many of them go Some of the charger manufacturers
Speaker 3: have put Tesla's connector on the thing, so you went
Speaker 3: to a charge point one, it might now have the
Speaker 3: Tesla or Next connector as it's called.
Speaker 1: So now when I go home next summer, it might
Speaker 1: be a very different experience, and I might be waiting
Speaker 1: in the queue for other cars to get off of
Speaker 1: these chargers, because that does happen when they get completely flooded.
Speaker 1: You have to kind of sit there and wait five
Speaker 1: minutes for somebody else to vacate the charger.
Speaker 3: Yeah, and one of the things of this deal that
Speaker 3: didn't get well highlighted was that they only actually access
Speaker 3: twelve thousand of the superchargers and there's nineteen thousand in
Speaker 3: the system. So they're actually doing a little bit of
Speaker 3: probably analysis to say which ones have low utilization and
Speaker 3: can take other people, which one of the premium locations
Speaker 3: for Tesla drivers that we want to keep, So they're
Speaker 3: not giving access to everything. Now.
Speaker 1: I want to talk about this in terms of profitability
Speaker 1: because when I thought about chargers a couple of years
Speaker 1: ago was when Tesla was initially launching this exclusive network.
Speaker 1: In many respects, I think a lot of this were
Speaker 1: thinking about the chargers as a way to facilitate Tesla
Speaker 1: ownership and that they themselves were not the business. But clearly,
Speaker 1: if Tesla's out there now selling the superchargers, it's not
Speaker 1: an exclusive use situation anymore. And this begs the question
Speaker 1: what are the margins like for these chargers and are
Speaker 1: these themselves a business in their own right? And is
Speaker 1: the game really very much changed to being about cars
Speaker 1: and charging rather than focus specifically on selling the vehicles.
Speaker 3: I mean, in one of the tweets Musk did, he
Speaker 3: said it was about we're not looking to make much
Speaker 3: profitabilities about ten percent margin we're looking for. Some of
Speaker 3: the companies are now if you look across Europe or
Speaker 3: Lego is one that is on the stock exchanges, and
Speaker 3: they do fast charging, and that's one of the main
Speaker 3: things they're now aiming at. They're saying, we can pay
Speaker 3: back these chargers in four years and the IRR can
Speaker 3: be twenty five percent. So certainly there's glimpses of it.
Speaker 3: In BP's investor presentation recently, maybe three weeks ago, Bernard
Speaker 3: Loney was saying that a bit DA positive for Germany
Speaker 3: and China. So there's certainly signs that this is going
Speaker 3: in the right direction. If you look at some of
Speaker 3: the charge point operators though, so eve Goo is one
Speaker 3: in the US, they're selling electricity. They have made their
Speaker 3: revenues have grown quite a lot, but if you look
Speaker 3: at the percentage of revenues, they've had to move into
Speaker 3: the game instead of selling electricity, building the chargers for
Speaker 3: other people, So sixty six percent of their total revenues
Speaker 3: were actually instead of their original business model, we're going
Speaker 3: to sell electricity, they're now making most of their revenue
Speaker 3: from building chargers for other networks.
Speaker 1: Oh well, okay, so now, Corey, you have this experience
Speaker 1: recently in California using the Tesla network in where it
Speaker 1: is actually most prevalent. Did you go to any other chargers?
Speaker 2: No? And you know what, it's more so because it's
Speaker 2: so integrated into the car experience and knowing what you
Speaker 2: do as a US driver. I mean the number of
Speaker 2: newspaper articles that pop up on a monthly or quarterly
Speaker 2: basis saying Electrify America charger down or four out of
Speaker 2: five down. It just makes you now want to even
Speaker 2: con h those options. And Tesla makes it really easy
Speaker 2: with the app integration, so much so that when we
Speaker 2: were talking about the NEV program before, part of NEV
Speaker 2: requires all of the other charging operators, the charge Point,
Speaker 2: ev GO, Electrifi America to kind of come together to
Speaker 2: have a common app experience. Tesla was exempt from that
Speaker 2: requirement because when the Biden administration struck a deal with
Speaker 2: Musk to get those superchargers open that Ryan was talking about,
Speaker 2: they basically said, Tesla, you can kind of keep your
Speaker 2: own app and keep your own data to yourself. So no,
Speaker 2: it wasn't a consideration, and frankly, without being confident in
Speaker 2: the uptime, it's hard to make that decision. My dad
Speaker 2: also drives or drives a Tesla for his day to
Speaker 2: day life, and it was hard to even direct him
Speaker 2: when he was in a bit of a charging desert
Speaker 2: towards one of those other charging companies, just because if
Speaker 2: they were down, he would be so far away from
Speaker 2: the supercharger that was likely to be up that he
Speaker 2: could be in some real ev related i'd say range danger.
Speaker 2: So no data, it's really sticking with the Tesla network
Speaker 2: has worked out quite well here and so yeah, from
Speaker 2: my experience, I wasn't even looking at so use a
Speaker 2: kind of other adapter.
Speaker 1: So we certainly expect to see some real enhancements to
Speaker 1: the I guess guiding one two a charger and actual
Speaker 1: real time information regarding what's available, what's working, and what's
Speaker 1: not in the near term in order to facilitate I
Speaker 1: guess the wider rollout. Does that then mean that that's
Speaker 1: going to provide an advantage to some of these other networks,
Speaker 1: or do we think that because Tesla's so far ahead,
Speaker 1: and now you're indicating that so many companies are actually
Speaker 1: jumping on to this particular existing network, that really that's
Speaker 1: the one most poised to expand.
Speaker 2: It's not like Tesla's. It's a integration with these vehicles
Speaker 2: moving forward is going to be seamless. I mean, when
Speaker 2: you're operating the supercharger network to date, there's been four
Speaker 2: different vehicle models that they've had to work on, and
Speaker 2: you know, we're all still waiting for the cyber truck
Speaker 2: to see if that's able to work seamlessly. Now, when
Speaker 2: you're talking about dozens of different models from different automakers
Speaker 2: before you're even getting to be adapter that Ryan mentioned,
Speaker 2: let's say we're you know, a year and a half,
Speaker 2: two years from now, that's still a lot for an
Speaker 2: opt or to manage. On the other hand, when it
Speaker 2: comes to the competitors, and we could jump into the
Speaker 2: joint venture that was announced the joint Consortium of seven
Speaker 2: auto makers, at some point there just isn't kind of
Speaker 2: a clear game plan for how these guys are going
Speaker 2: to even kind of claim the number two spot in America.
Speaker 2: At least on my end, I could say there's definitely
Speaker 2: a lot of charging need here. So while Tesla's probably
Speaker 2: growing stronger with a lot of these announcements, it's not
Speaker 2: a done deal that they'll be the only large charging
Speaker 2: network provider here. But on the other hand, at this
Speaker 2: early point, it's hard to say that you can jump
Speaker 2: on bandwagon of another charging infratructure operator to say that
Speaker 2: they will learn from the early stage and be able
Speaker 2: to take advantage of the market as it grows here.
Speaker 3: So the US manufacturers have formed a consortium recently, so
Speaker 3: they're saying we're going to build thirty thousand charges, which
Speaker 3: is the biggest announcement we've seen. That will put them
Speaker 3: in a strong position. But then the question comes can
Speaker 3: they deliver that? Can they deliver what they've got? Can
Speaker 3: you go from a standing start to being something producing
Speaker 3: tas been doing this for probably I don't know what
Speaker 3: it was, twenty twelve, something like that, So delivering it
Speaker 3: is difficult. Having the sites is difficult, getting the grid connections.
Speaker 3: As a kind of high level point, we don't know
Speaker 3: whether we're going from a position of this really reducing
Speaker 3: in costs significantly over time, because the key pieces of
Speaker 3: land might go, the good grid connections may go. What
Speaker 3: Tesla has that we've not discussed. There's low costs of hardware,
Speaker 3: and we've seen that come out in some of the
Speaker 3: Nevy grants. So that five states I think have been awarded.
Speaker 3: We'd already analyzed this last year in our kind of
Speaker 3: charger survey. Most people are somewhere between one hundred and
Speaker 3: twenty and two hundred thousand dollars per connector on kind
Speaker 3: of a project level, and Tesla seemed down at like
Speaker 3: forty thousand. I was reading one today that said seventeen
Speaker 3: thousand per connector. So they're able to do this much cheaper.
Speaker 3: Some of that is, I think the hardware production scale,
Speaker 3: and some of it I think is things like they're
Speaker 3: prefabricating the chargers, they're putting it like a big block
Speaker 3: of them in one go.
Speaker 1: What are the companies that are essentially trying to pose
Speaker 1: competition for the incumbent?
Speaker 3: So that deal and Corey, you might be able to
Speaker 3: correct me if I'm wrong, basically includes most of those
Speaker 3: in Ionity, so being able to be HYONDI Mercedes, Stalantis GM.
Speaker 3: It's maybe interesting in a way of who's not in
Speaker 3: it because Ford and Volkswagen are not in it, so
Speaker 3: Ford is not so obvious. Volkswagen have Electrify America, so
Speaker 3: maybe they're saying we don't want to fund the like
Speaker 3: another network we've already got on.
Speaker 1: Network, so there's a third network. So essentially you would
Speaker 1: need to in some way well be allowed to use
Speaker 1: each of these three networks if you wanted to have
Speaker 1: one complete network that would enable you to avoid charging deserts.
Speaker 1: And I think this is one of the things that
Speaker 1: really differs from when you think about petrol stations, where essentially,
Speaker 1: not only are they everywhere, but more importantly, you can
Speaker 1: go to anyone and anyone will take your money. Do
Speaker 1: we foresee a future in the US where these different networks,
Speaker 1: at least on a page you go basis, will be
Speaker 1: available to anybody with an electric vehicle or is it
Speaker 1: going to still continue to be quite restricted by brand
Speaker 1: to charger type.
Speaker 2: That's what the Biden administration hopes, right. A lot of
Speaker 2: these heavy grant requirements is aiming for interoperability, and Ryan,
Speaker 2: to your point, we're only talking about two to three
Speaker 2: different charger types, right. We've talked to at CCS, and
Speaker 2: next there's an older version here called Chadmo, which is
Speaker 2: really only used by Nissan. So the networks are kind
Speaker 2: of I like to think of them as maybe gas
Speaker 2: station companies or petrol station companies. It doesn't mean that
Speaker 2: the same EV can't work if they have a NAX
Speaker 2: connector available. But I think the bigger question around kind
Speaker 2: of these competitors that Ryan just got to is, is
Speaker 2: this new kind of joint consort SIAM going to be
Speaker 2: on the level of getting that land because right announce
Speaker 2: spencer nice, but building EV chargers is more difficult. And
Speaker 2: now when you're seeing these really low Tesla bids, even
Speaker 2: if you're a state using nev funding attempting to kind
Speaker 2: of have a diversity of chargers, if Tesla is able
Speaker 2: to do, it's so much cheaper and they keep on
Speaker 2: winning these grants, they're going to only continue to gain
Speaker 2: more of that market power. But at least from a
Speaker 2: conceptual standpoint, if there's two or three or four big
Speaker 2: charging networks here in the US, that'd probably be a
Speaker 2: good thing for consumers. It's less of a tech problem
Speaker 2: and more of a you know, making a profit and
Speaker 2: competitive advantage issue.
Speaker 1: So you mentioned Electrify America, which is one of the
Speaker 1: larger US electric vehicle charging companies, but there has been
Speaker 1: some scrutiny recently over some of these failings. You referenced
Speaker 1: broken chargers showing up and things not quite working. So
Speaker 1: paint a picture in my mind of what exactly is
Speaker 1: going on there.
Speaker 3: So I think there's two dynamics, one that is maybe
Speaker 3: less talked about and one that is a bit more
Speaker 3: of it. So one of them is that you've got
Speaker 3: all of these different vehicle manufacturers trying to work with
Speaker 3: one charger network rolling out. Then the technical standards are
Speaker 3: not working, some of them are turning off. Maybe you
Speaker 3: could argue this is like a separate side business of
Speaker 3: VW and they're not so interested in it. Fundamentally, this
Speaker 3: was legislated that because of diesel Gate, they had to
Speaker 3: own this business. Even from there you could say, well,
Speaker 3: why wasn't the money given to other people? Why did
Speaker 3: it VW get to spend it themselves. They then had
Speaker 3: this kind of arguably strategic advantage. Then you've got the
Speaker 3: like press versus reality side of it. So if you
Speaker 3: look at the statistics, in twenty twenty one, they delivered
Speaker 3: forty one gig what hours of energy and in twenty
Speaker 3: twenty two they'd delivered one hundred and seventy three gig
Speaker 3: what hours of energy, So there are actually delivering much
Speaker 3: more energy people are whilst they're all we hear about
Speaker 3: is failures they're delivering a lot of stuff, but no
Speaker 3: doubt there is a lot of talk about how bad
Speaker 3: the situation is and that it never works. And I
Speaker 3: think that's led to a lot of the car manufacturers
Speaker 3: basically saying we're kind of annoyed behind the scenes at
Speaker 3: VW and maybe fed into this other network that they've
Speaker 3: the joint venture that's come together.
Speaker 1: And you said, VW has this network because of diesel Gate,
Speaker 1: And first of all, explain what diesel gate is for
Speaker 1: those of us who have a short corporate memory. And secondly,
Speaker 1: why because of diesel Gate.
Speaker 3: I'll give a short answer, and I'm sure Corey knows
Speaker 3: all of the details. But basically, diesel gate, they put
Speaker 3: devices on the cars that would perform in the test
Speaker 3: runs when you go out to see what emissions the
Speaker 3: car were giving, and they give a low score, and
Speaker 3: it was actually found in the wild that they were
Speaker 3: giving much more higher emissions. And therefore governments realized this
Speaker 3: and they said, well that's not correct, and they find
Speaker 3: them a lot of money.
Speaker 2: So in the US there's a lot of guessoline over
Speaker 2: a diesel. But there was a part of the I
Speaker 2: think global Volkswagen issues with emissions testing in the Environmental
Speaker 2: Protection Agency back in about twenty fifteen called them out
Speaker 2: on them and successfully negotiate the settlement. So, in terms
Speaker 2: of context of why this was happening and why not
Speaker 2: giving it to a bunch of charging companies, Tesla was
Speaker 2: an existing company at that point, But going back to
Speaker 2: twenty fifteen, evs were just a trickle in the bucket,
Speaker 2: and so what the EPA at the time was thinking
Speaker 2: is they did something bad, We're going to have them
Speaker 2: put the money towards funding things like charging infrastructure, maybe
Speaker 2: some school buses or buses to do something good right,
Speaker 2: to kind of build out the network of the future.
Speaker 2: What's interesting is we've been talking a lot about NEV.
Speaker 2: Two billion dollars is one third of the NEV program
Speaker 2: just about and you could see maybe money doesn't go
Speaker 2: as far as it should. Volts Wagon I think Ryan,
Speaker 2: you're right that there is definitely a partier maybe reality
Speaker 2: than the statistics show. And in that charge that EV
Speaker 2: magazine piece, which is by John Volker, a lot of
Speaker 2: the conversation in his piece is around the frustration they
Speaker 2: had there with electric fire a market in particular, just
Speaker 2: because they had such a long lead up time and
Speaker 2: it's even rubbed off to some extent on the other
Speaker 2: EV charging companies, even if it's not necessarily their fault.
Speaker 2: What I'd say from an analyst perspective, and I think
Speaker 2: it'd be great for where both my team and Ryans
Speaker 2: seem to have more of this information, is just more
Speaker 2: transparent data on uptime. I think that's been a frustration
Speaker 2: for a lot of researchers in the US to get
Speaker 2: a sense of are things really as bad as news
Speaker 2: reports say. Unfortunately, Electrified America in particular has been pretty
Speaker 2: protective of their data, you know, understandable in some ways
Speaker 2: because it's their customers, but to combat that narrative, and
Speaker 2: so when these Tesla announcements have been happening around automaker
Speaker 2: switching to next, there hasn't even been much of a
Speaker 2: pushback from some of the CCS companies. If anything, they've said, okay,
Speaker 2: we'll just add a connector, as opposed to saying, well,
Speaker 2: the reality is CCS does provide some good benefits, in
Speaker 2: particular around vehicle to grid. Tesla says their chargers can
Speaker 2: do it, but we haven't really seen it to date.
Speaker 2: And in some of that three hundred and fifty kW
Speaker 2: charging that for example, the high end Dionic five uses
Speaker 2: Tesla says their V four of their supercharger, we'll be
Speaker 2: able to do that. But again, a lot of this
Speaker 2: is depending on Tesla, and so you haven't even seen
Speaker 2: the CCS. Folks make the arguments that many of the
Speaker 2: cool ev technologies are built around ccs or CCS two
Speaker 2: in Europe PR battle.
Speaker 3: It's almost like Tesla obviously wants you to think it's
Speaker 3: the best connector. It's this, that and the other. They've
Speaker 3: literally got Mary Barr saying it's a lighter connector, it's
Speaker 3: even better. After what was it five maybe what six
Speaker 3: years of them saying they're using ccs, they're just like
Speaker 3: totally bowing to Tesla. Yet you then look at the
Speaker 3: other side of the story and you think, well, why
Speaker 3: was elected fire America not out there with four times
Speaker 3: more energy distributed in one year and that all of
Speaker 3: these good things. And I think there is a little
Speaker 3: bit of like the PR play and that obviously for Tesla.
Speaker 3: Now they've got all these automakers on their system, that
Speaker 3: system goes through standards that they want. They're going to
Speaker 3: their chargers. What if they said, oh, well, to use
Speaker 3: those twelve thousand chargers. Now you've got to pay a
Speaker 3: bigger deal in five years time. Like, we don't know
Speaker 3: the terms of those deals, but certainly seems quite quite
Speaker 3: strong for them. And it's not just the automakers that
Speaker 3: are slightly worried about that. If you're a charging operator
Speaker 3: and you've decided to put the Tesla connector in what
Speaker 3: Tesla then say, oh, to use our connector. Now you
Speaker 3: have to pay some more money as well. So people
Speaker 3: are a bit unsure. But for Tesla, that was it
Speaker 3: was like a month or two months of just like
Speaker 3: positive news on everybody bow and all of a sudden
Speaker 3: they're in this dominant position. But there's a reason why
Speaker 3: the Toyota's Dealantis's high ond ikeas have not gone to
Speaker 3: that way. Although when you read the news you might
Speaker 3: think everybody has the realities, they haven't.
Speaker 2: One thing. I'll just say to give Tesla a little
Speaker 2: bit of credit and not just say that they're completely,
Speaker 2: not completely just pushing this on everyone. They have been
Speaker 2: working with the US Department of Energy and Transportation's Joint
Speaker 2: Office to basically work on sandradization through an organization known
Speaker 2: as SAE International. So they're charging Department of Engineers at
Speaker 2: TESLA are doing a lot of the right things. This
Speaker 2: standardization process is expected to take through the rest of
Speaker 2: this year, which is on the expedited process that began
Speaker 2: in June. So assuming they dot the i's and cross
Speaker 2: the t's correctly, there is a lot of smart maneuvering
Speaker 2: the Tesla's doing. And want to at least say this
Speaker 2: isn't just completely at the you know, Elon tweeted it
Speaker 2: out and it's it's only happening via tweet. We don't
Speaker 2: know what the contracts look like. And to Ryan's point,
Speaker 2: there is a lot of uncertainty in the space, but
Speaker 2: there is a really good charging in for structured division
Speaker 2: at TESLA, and they are going through the motions on
Speaker 2: a lot of the correct standards. Assuming that these processes
Speaker 2: are complete, I think to your point, Ryan, there's been
Speaker 2: almost too many news reports that says this is going
Speaker 2: to be super easy, this is only going to be
Speaker 2: a plus for the US consumer immediately, and I think
Speaker 2: the reality is kind of somewhere in between. It has
Speaker 2: a lot of upside to make the US have a
Speaker 2: better charging network, but it's not a simple light switch
Speaker 2: that all the automakers are going to flip and that
Speaker 2: Tesla's going to necessarily play ball on everything. So I
Speaker 2: think you never want to give an answer where it's
Speaker 2: really uncertain. But I think the next six months are
Speaker 2: going to determine how smoothly this goes. And then really
Speaker 2: it might take a full year until you're getting the
Speaker 2: model year twenty twenty five cars to even see really
Speaker 2: how successful is this rollout. And one last thing, I'll
Speaker 2: say that Ryan, maybe you've heard differently, but a lot
Speaker 2: of automakers when you ask them over here, are you
Speaker 2: just going to have a NAXT connector on your model
Speaker 2: twenty five cars or if you're going to have both
Speaker 2: CCS and next and they won't give a straight answer.
Speaker 2: So even the automakers who have made the Tesla switch
Speaker 2: announcement having come out and said, you know, are we
Speaker 2: fully moving away from from ccs or are we going
Speaker 2: to kind of straddle a middle line? And so again,
Speaker 2: if I'm a consumer, you want to be patient. If
Speaker 2: you're buying a non Tesla car.
Speaker 1: Wow, six months is not that long, but certainly you
Speaker 1: have So we've got automakers banding together trying to solve
Speaker 1: the solution by making let's say alliances with one another,
Speaker 1: and then the NEVY to stimulate some of the growth
Speaker 1: here in the federal government then looking to essentially see
Speaker 1: this through, to see this network become more robust, and
Speaker 1: to really facilitate that change to electric vehicles. What then,
Speaker 1: is the role of state governments and have they been
Speaker 1: more of a facilitator or hindrance into some of this
Speaker 1: roll out across different parts of the US.
Speaker 2: I think the state governments outside of California, they're very
Speaker 2: early on the EV trajectory. I mentioned the state EV
Speaker 2: market note that I've been working on, and you do
Speaker 2: have some states that are beginning to break through with
Speaker 2: their electric vehicle share of new car sales, which is
Speaker 2: an early indicator of how EV markets are changing. So
Speaker 2: places like Colorado, Nevada, I got to plug, my home
Speaker 2: state of New Jersey are all doing quite well. And again,
Speaker 2: each state can be as large as some European countries,
Speaker 2: so it's not necessarily easy to do this for the
Speaker 2: first time. They've all submitted their plans for NEVY as
Speaker 2: of last year, and to Ryan's point, they're working on
Speaker 2: proposals now to get the charging companies that will eventually
Speaker 2: put up the chargers at their sites. I think ultimately
Speaker 2: the state governments are going to be helpful, but right
Speaker 2: now things are moving slower than I'm sure a lot
Speaker 2: of EV consumers would want. I think the most important
Speaker 2: thing is less speed and more making sure that they've
Speaker 2: done it right. And frankly, the CCS and NACT kind
Speaker 2: of conundrum here has added another layer of complexity for
Speaker 2: these state governments to have to grapple with. I'll give
Speaker 2: you an example. So some states like Texas are now
Speaker 2: requiring Tesla's NAXT connector to be built on every NEVY
Speaker 2: funded charging site in the state of Texas. There are
Speaker 2: some other states that are doing that as well. And
Speaker 2: so what that means is, if you're a charging infrastructure
Speaker 2: operator and you want to build in Texas, you have
Speaker 2: an additional requirement on top of all of the national
Speaker 2: requirements to boost Tesla's standing. Not necessarily because Texas houses Tesla.
Speaker 2: There might be a part of it the Austin factories there.
Speaker 2: But states don't have an easy job figuring out how
Speaker 2: to navigate this. They do have a lot of federal
Speaker 2: resources and there's a ton of money, but they have
Speaker 2: to really make sure that this isn't a boondoggle. So
Speaker 2: I think the way they're going about this is taking
Speaker 2: their time to do this right as opposed to maybe speed.
Speaker 2: The law passed almost two years ago now, and we
Speaker 2: haven't seen really any chargers built, and.
Speaker 1: You're saying that you expect to see things. Really I
Speaker 1: guess the dust is settle over the next six miths
Speaker 1: a twelve months. But what are the longer term Biden
Speaker 1: administration goals that are expected to outlive his administration? Perhaps
Speaker 1: you know what is it that they're actually shooting for
Speaker 1: with some of the different stimulus that they're looking at
Speaker 1: in this space.
Speaker 2: By the administration for a long time has had a
Speaker 2: target of five hundred thousand V charging connectors by the
Speaker 2: end of the decade. Whether that's the stations themselves or
Speaker 2: the connectors. I've heard more on the connector's side, but
Speaker 2: that's a bit of a vageity there. In terms of
Speaker 2: the actual EV ship of sales, they had an executive
Speaker 2: order aiming for about fifty percent EV share of sale
Speaker 2: by twenty thirty and here at BNEF when we have
Speaker 2: our long term outlook, we expect they'll be able to
Speaker 2: meet that target. And again they've put billions of dollars
Speaker 2: towards this electric vehicle transition from not just the charging
Speaker 2: side we've been talking a lot about, but also billions
Speaker 2: of dollars in electric vehicle tax credits. Just a couple
Speaker 2: of weeks ago, there was an announcement about fifteen billion
Speaker 2: dollars in EV manufacturing and retooling grants. So even outside
Speaker 2: of charging world that we spent a lot of time
Speaker 2: on today, the Biden administration is all in on kind
Speaker 2: of fostering this EV growth. But again, when we're talking
Speaker 2: to not just auto companies and other stakeholders, but consumers,
Speaker 2: charging anxiety remains one of the main obstacles here. It's
Speaker 2: no longer the models themselves, or even the prices of
Speaker 2: some of these models, while still high, is more in
Speaker 2: line with the average car press for new vehicles. Charging
Speaker 2: is a pretty big hurdle.
Speaker 3: I think that the if you think about our research,
Speaker 3: so the five hundred K target, I think is a
Speaker 3: great example of a politician setting something that they're easily
Speaker 3: going to meet. We think somewhere more like two million
Speaker 3: charges by the twenty thirty deadline that they're talking about.
Speaker 3: If you reflect that back to some of the conversation
Speaker 3: that we've had so far, we're saying there's thirty thousand today,
Speaker 3: So whils we're saying Tesla is doing amazing. There is
Speaker 3: actually a big gap for other people in this next
Speaker 3: eight years which can be filled by those automakers and
Speaker 3: other people in Europe. We just see so many players
Speaker 3: and they're not quite in the US yet. So BP
Speaker 3: saying they're going to spend a billion in the US.
Speaker 3: SHELL have acquired a couple of companies and we'd expect
Speaker 3: them to come in as well. A little bit different
Speaker 3: where in EU you get a lot of utilities involved.
Speaker 3: Not necessarily as easy for the utilities due to the
Speaker 3: structure of them in the US to be quite as involved.
Speaker 3: But overall, what I'd say is you've gone from a
Speaker 3: position in the US with limited momentum. There's not been
Speaker 3: the right regulation. The IRA has come in, and then
Speaker 3: these other people have decided, do you know what, Actually
Speaker 3: there's going to be a market for evs. We didn't
Speaker 3: really believe it before, but now we believe it. It's
Speaker 3: like the Trump administration to the Biden, the IRA money
Speaker 3: then coming in, and nothing really shows it more than
Speaker 3: those automakers coming together six years after they realized they're
Speaker 3: going to have to do this in Europe. They've then
Speaker 3: done it in America. Like, really, they'd come to this
Speaker 3: conclusion in Europe six years ago and it's taken them
Speaker 3: that long to go Okay, well, really is real. The
Speaker 3: US market is kind of evolving. Whether we're going to
Speaker 3: meet these targets has many dependencies, and one of the
Speaker 3: biggest ones you hear across the world is the grids.
Speaker 3: Can you build the grid to do so? And some
Speaker 3: of the regulators and energy commissions will have to focus
Speaker 3: on that area to get this going.
Speaker 1: And certainly the necessity for a robust grid is something
Speaker 1: that we addressed in a show just a couple of
Speaker 1: weeks back. So it does underpin so much of the
Speaker 1: transition in the energy industry. And then you're in electric vehicles,
Speaker 1: so I think that actually, Corey, when you were talking
Speaker 1: a second ago, you referred to it as a potential boondoggle.
Speaker 1: And here's to hoping that when the dust settles, this
Speaker 1: will be a much more robust charging network. For anybody
Speaker 1: out there who really wants to understand why people are
Speaker 1: so excited about superchargers and why they are such a
Speaker 1: point of reference, I will say that my personal experience
Speaker 1: of you know, spending nearly a month renting a car
Speaker 1: and then doing a road trip and trying to make
Speaker 1: it happen will certainly bring to light why thing that
Speaker 1: so many of us who are looking at this transition
Speaker 1: and actively engaged in it, see these solutions as something
Speaker 1: that they're certainly interested in watching very closely because it
Speaker 1: facilitates how you build your Saturday, or build your road
Speaker 1: trip and live your life. So it's really interesting to
Speaker 1: see from your research that you think that there's a
Speaker 1: lot to gain and that there's a gap between these
Speaker 1: targets and where it is will actually end up. And
Speaker 1: so I would say I've got maybe the one thing
Speaker 1: that each of you are watching most closely. So I'm
Speaker 1: watching which percentage of these chargers are actually going to
Speaker 1: end up being superchargers. What will be the one thing
Speaker 1: that you're most intrigued by at this point in time
Speaker 1: and kind of keeping your ear to the ground where
Speaker 1: you don't know if there is an answer yet.
Speaker 3: How many charges actually go in from each of these
Speaker 3: companies saying they going to put charges in?
Speaker 2: Oh right, And I think for me, I'm most curious
Speaker 2: to see if Tesla successfully finishes that certification process without
Speaker 2: any hiccups. And if automakers fully switch with only a
Speaker 2: NAX connector and once they're moving away from adapters, or
Speaker 2: if they choose to both live in CCS world and
Speaker 2: knocks at the same time by even having two adapters
Speaker 2: on each vehicle, both are potential pathways for them to take.
Speaker 2: But I'm curious to see if they're really all in
Speaker 2: on TESLA.
Speaker 1: All right, well, let's keep an eye on all of
Speaker 1: the above. Thanks for joining today, Thanks Dana, Thanks Tana.
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