Abhirup Roy
SAN FRANCISCO (Reuters) – Elon Musk’s decision to gut Tesla’s (NASDAQ:) electric vehicle charging team is hampering plans to roll out new fast charging stations and could delay President Joe Biden’s efforts to electrify U.S. highways.
Last year, the Biden administration announced rules for an ambitious plan to expand the country’s charging infrastructure and accelerate the adoption of electric vehicles. Under the National Electric Vehicle Infrastructure (NEVI) program, the government is giving states $5 billion over five years to build 500,000 electric vehicle chargers.
Electric vehicle market leader Tesla, which also operates the largest network of fast chargers, called Superchargers, in the US and is by far the largest recipient of those federal funds, was seen as a critical part of that plan.
However, since news of Tesla’s sudden halt to EV charging broke, charging company executives say they have received phone calls from landlords looking for a new partner for their private EV charging projects after Tesla pulled out.
Now charging companies are preparing for Tesla’s withdrawal from the federal program. This, they say, could lead to a new push in the already slow rollout.
“This will delay the introduction of NEVI. There’s no doubt about it,” said Aatish Patel, co-founder of XCharge North America, which makes electric vehicle chargers for fleets and charging station operators.
If Tesla refuses, states will start proposing NEVI-funded charging projects again, he told Reuters. “Many of these projects will not be built this year or in the time frame that was originally dictated.”
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Patel said real estate companies representing about 10 non-NEVI properties in Texas, Louisiana and New York called after news of the layoffs and said Tesla was leaving and they were looking for a replacement.
Tesla has won charger awards for 69 of the 501 NEVI-funded sites, according to San Francisco-based research firm EVAdoption.
“I speak to any NEVI sites that have been handed to them. They’re not going to move forward on them,” Brendan Jones, CEO of Blink Charging (NASDAQ:) told Reuters. He said Blink received three inquiries in two states about several private sites that Tesla abandoned after the layoffs.
The implementation of the federal program is already sluggish. Long-awaited rules for receiving federal funds were finally laid out early last year. Only a few federally funded charging stations were open to the public.
PULLING THE FORK
Following the layoffs, Musk said in a post on his social media platform X that Tesla plans to “expand the Supercharger network, but at a slower pace for new locations and focus more on 100% uptime and expansion of existing locations.”
He did not respond to questions from Reuters about the implications of his decision.
A spokesman for the federal Joint Energy and Transportation Administration, which oversees the NEVI program, said in an email that it does not expect individual business decisions to impact government-funded electric vehicle charging projects.
States that have provided Tesla with NEVI sites are closely monitoring the situation.
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Colorado will adjust its program as needed, said Kay Kelly, chief of innovative mobility for the Colorado Department of Transportation. Texas, the largest beneficiary of NEVI funds, said it does not expect any consequences from the layoffs at Tesla.
However, Tesla’s change of plans will affect the entire electric vehicle industry. Almost all automakers last year decided to adopt Tesla’s North American Charging Standard (NACS) for their vehicles starting next year. This could be a plus for other charging startups, as well as recently laid off Tesla employees.
“There will be a lot more NEVI locations if Tesla abandons projects they’ve already won or withdraws their bids,” Rick Wilmer, CEO of charging company ChargePoint (NYSE:), told Reuters. “This will be an opportunity for others to step in and fill that void.”
Competitors like EVgo are eager to hire those Musk fired. “If you’ve been impacted by the recent layoffs at Tesla, we invite you to explore EVgo’s (NASDAQ:) wide range of job openings,” the charging company’s talent acquisition manager said in a LinkedIn post.