The two shared their thoughts on several topics, including the partnership’s impact on adoption and whether Tesla should be shaking in its boots. (Spoiler alert: It shouldn’t.)
What jumped out when you heard this?
NAU: At first glance, a standardized charging experience across different EV manufacturers and models can make charging more convenient, reliable, and user-friendly, further encouraging people to transition to EVs. Moreover, this can also empower and educate business owners, landlords, and third-party partners of the benefits of offering charging stations to their customers and tenants, which also happens to be the growth strategy here at Loop.
While this holds many promises, there might be some challenges and concerns. Coordinating the efforts of seven automakers could be complex, and they may face issues related to interoperability, data sharing, and infrastructure – such as imposing pressure on the electricity grid.
However, finding a great partner in the EVSE (electric vehicle supply equipment) space for the equipment and infrastructure rollout strategy would make many of these issues go away. It’s important, though, that the automakers do not make the same mistakes that have plagued the other DCFC network rollouts – most notably equipment/network reliability issues.
PATEL: The fact that these brands are coming together was surprising, given there’s a lot of different strategies there in terms of charging port, architecture, and market segment. The amount doesn’t surprise me, given the numbers thrown around these days…until you start considering the number of chargers they want to install.
The per port cost with that US$1bn (the amount the partners said they planned to invest) and 30,000 chargers is quite low for the industry. The timelines for the first unit (2024) are also quite lofty. From my perspective, it’s an eyebrow raiser in the sense of, “How do they intend on meeting this on their first try?”
What do you think the impact will be?
NAU: The impact will be dictated by the decision to focus on a short-term or long-term approach to the investment.
If the automakers seek a quick return, it is likely that their network will suffer from the same issues that plague the incumbent EVSE network operators with reliability, distrust, and frustration from consumers. Additionally, as their brand names will be attached to this network, the probability of a negative impact to sales of their EVs increases.
However, if they look at this from a long-term perspective, they can ensure to create a network that can actually help accelerate the sales of their EVs – and most importantly rest some control away from Tesla as the de facto leader of the future automotive space.
They must take a look outside of the incumbent players to find the right partners for this investment. The old approach is what has led to Tesla's network being anointed the leader of this space, mostly associated with its reliability.
If they do play said “long game,” this collaboration could foster a spirit of competition and innovation in the EV charging market. Companies like Loop are constantly trying to differentiate themselves by offering unique solutions, affordability, and overall reliability, driving the advancement of charging technology.
An endeavor like this will require substantial investment in EV infrastructure. We can see this investment contributing to job creation, economic growth, and a positive environmental impact on climate change. Even more, an expanded charging infrastructure may also drive investment in rural and less-developed areas as EV charging companies, like Loop, begin to focus on providing stations across diverse geographic locations.
PATEL: The alliance shows commitment to the EV movement and how it plays in these automakers’ overall business. What’s nice to see is that it’s a global alliance, a uniform conjunction.
There is opportunity for OEMs like us. At the end of the day, we just need to understand their vision.
This will help raise the importance of EVs to the industry and the North American market in general. If they are able to pull off the deployments, or even a subset of it, the impact to drivers will be huge in terms of giving them some mobility choices.
With that said, these are all “ifs”. Impact is dependent on chargers getting in the ground, which has been touted by many for years – with little to no results to show.
Will this speed EV adoption?
NAU: This will help accelerate EV adoption by alleviating range anxiety, which is the first hurdle for any first-time EV consumer. If they go about this investment the right way, they will also solve the network reliability issue and keep people in the EVs they purchased for years to come.
As a result, consumers may feel more confident in adopting EVs, leading to an increase in EV sales and chargers alike.
PATEL: They’re committing a strong amount, but they need to be able to deploy this in an effective manner to spur adoption, targeting areas that need it most with a variety of services and Kw levels. You can’t just place 350Kw chargers everywhere – that won’t solve the needs of today’s EV market.
If chargers are deployed, then yes, it will speed adoption. I think announcing that chargers are going to be installed and actually installing them are two different things.
If the OEMs are able to meet and install in a way where their target markets are able to gain confidence in E-Mobility, as well as maintain these chargers so they’re a system that can be relied on, adoption can speed up.
How will Tesla be impacted?
NAU: I think that Tesla opened the door to show the world the value that can be generated from building a broad, reliable EV charging network. However, Tesla will not be able to supply enough infrastructure to satiate the demand generated by EV adoption.
Moreover, consumers must have reliable alternatives – a monopoly simply doesn’t work. I am not sure that it hurts Tesla’s overall strategy ... a broader network will ultimately lead to more EV sales at the end of the day.
PATEL: This maybe put an additional group on the board, but I don’t think this effects Tesla that much. Tesla is playing NBA games, and this is a college level announcement. Down the line, if performance and impact are maintained, it will be something that Tesla needs to keep tabs on.
For now, from my viewpoint at least, this doesn’t really change much for Tesla and its goals.