Tesla Has Won the EV Charger Wars

"Tesla's apparent triumph in the battle of the electric-vehicle chargers is good for everyone -- almost.

Shares of Tesla jumped 4% Friday after General Motors said late Thursday that it would follow Ford Motor in adopting Tesla's charging standard on its next generation of EVs. In exchange, GM's customers will be able to recharge their vehicles on Tesla's Supercharger network, starting next year.

The roughly $40 billion gain in Tesla's market value seems extreme for providing what is likely to be a low-margin service, but the market reactions make sense directionally: This is a win-win situation.

Tesla's network capacity will be more fully utilized as a result of Ford and now GM joining it, while the Detroit companies have taken a major step toward addressing range anxiety for their potential EV customers. This is still a barrier to the technology's adoption.

The losers are independent charging networks, which might not get as much traffic once they face competition from Tesla's network. In the longer term, they may even come under pressure to shift their systems to Tesla's standard, which could be expensive.

Shares of fast-charging network EVgo and slow-charging leader ChargePoint Holdings were down about 12% and 13%, respectively, in Friday's trading.

Both companies went public via special-purpose acquisition companies during the pandemic stock-trading boom and, like most former SPACs, haven't served investors well despite a powerful operational tailwind from the Biden administration, which is funneling billions of dollars into EVs, including $7.5 billion into chargers specifically.

Tesla uses a different charging plug than the independent providers. The competition between the two standards echoes previous battles over new technologies, such as between VHS and Betamax for videotapes or narrow-gauge and wide-gauge railways in Victorian England.

With Ford and now GM on board, Tesla seems to have all but won this one in the U.S. Its victory reflects both the higher number of chargers it offers and a more seamless and reliable charging experience. 

On the other side lay something of a tragedy of the commons, with nobody taking full responsibility for quality control or providing a comprehensive solution.

A shakeout among independent charging companies is widely expected, and Tesla's deals with Detroit may be a catalyst. Oil-and-gas companies that run old-fashioned service stations have been among the most aggressive consolidators so far: Shell bought Volta, another former SPAC, in March.

For most of the nascent EV industry, the emergence of a single, open standard for U.S. charging would be very welcome. There is a way to go yet, but the destination now seems clearer -- and drivers can relax a bit about their battery charge." [1]

1. Tesla Has Won the EV Charger Wars --- GM's decision to follow Ford in joining Tesla's network paves the way for a single, open U.S. electric-vehicle charging standard. Wilmot, Stephen. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 12 June 2023: B.9.