Tesla’s Supercharger Deals May Be Elon Musk’s ‘AWS Moment’

But some of Musk's EV rivals have doubts about adopting Tesla's charging standards.

Elon Musk in a black suit.
Is Tesla really winning the EV charging game? Chesnot/Getty Images

A growing cohort of electric carmakers are embracing Tesla (TSLA)’s EV charging standards. After Ford and General Motors struck partnerships with Tesla last month to allow their customers to use Tesla’s superchargers in the U.S. and Canada, Rivian announced a similar deal yesterday (June 20), and Korean auto giant Hyundai also expressed interest. Established automakers joining Tesla’s charging network could open a lucrative revenue stream for the Elon Musk-led company at a time when its electric vehicle sales slows, but some of Musk’s rivals are reluctant to let Tesla win the EV charging game.

Tesla’s Superchargers use a special plug known as the North American Charging Standard (NACS). It’s incompatible with the current industry-standard Combined Charging System (CCS). Under the Ford, GM and Rivian partnerships, owners of electric cars made by these three companies will be able to access 12,000 Tesla Superchargers in the U.S. and Canada with an adapter starting next year. Starting 2025, these companies will also begin installing NACS charging ports, instead of CCS ones, in new EVs.

Tesla is one of the few EV makers that have built their own charging networks. Most of its competitors have chosen to rely on third-party chargers due to the high cost of building their own. Currently, Tesla’s Superchargers account for about 60 percent of the total fast chargers available in the U.S., according to data from the U.S. Department of Energy.

Rivian, a luxury EV startup founded in 2009, has also built a small network of several hundred fast chargers. The company has plans to build more than 3,500 and said the project will continue despite the newly announced Tesla partnership.

“The adoption of the NACS will enable our existing and future customers to leverage Tesla’s expansive Supercharger network while we continue to build out our Rivian Adventure Network,” Rivian CEO RJ Scaringe said in a statement yesterday. Rivian has two flagship EVs, the R1T pickup truck and the R1S SUV.

Some automakers still have doubts about switching to Tesla standards

Also yesterday, Hyundai president Jaehoon Chang said he will consider adopting Tesla’s NACS standard but would have to determine that was in the interest of Hyundai’s customers.

One issue, Chang said, is Tesla Superchargers don’t allow for the faster charging Hyundai’s EVs can achieve on other chargers. Tesla Superchargers provide 480-volt direct-current fast charging. Hyundai’s new electric cars, including the Ioniq 5, can achieve up to 800 volts on some chargers.

“That’s what we will look into from the customer’s perspective,” Chang told analysts at the automaker’s investor day.

Peter Rawlinson, CEO of Lucid, another Tesla rival, believes future EV customers need as high as 1,000-volt fast charging.

“1,000 volts. That’s the future for EVs,” Rawlinson said in an interview with the Wall Street Journal on June 15. “And it doesn’t matter whether it’s a CCS plug or a NACS plug. That’s almost beside the point.”

Supercharger deals could be Tesla’s “AWS moment”

Still, analysts are bullish about the trajectory Tesla is on. Dan Ives, a well-known Tesla analyst with Wedbush Securities, called Tesla’s supercharger deals an “AWS moment,” referring to Amazon’s success with its cloud business, Amazon Web Services.

“The Rivian supercharger news [is] another sign it’s Game, Set, Match for Tesla owning charging domestically in the U.S. with more monetization the key looking ahead,” Ives tweeted yesterday.

Tesla charges a fee for using its Superchargers. Currently, charging accounts for a small portion of its total revenue, meaning ample room for growth. In the company’s latest quarterly earnings report, “services and other revenue,” which includes Supercharger fees, made up less than 10 percent of total revenue.

Tesla’s Supercharger Deals May Be Elon Musk’s ‘AWS Moment’