Yahoo Finance Musk Undercuts Tesla Chargers That Biden Lauded as ‘a Big Deal’
(Bloomberg) -- Elon Musk has upended a deal the White House saluted early last year to open Tesla Inc.’s electric-vehicle chargers to other automakers, dealing a blow to President Joe Biden’s EV agenda.
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Musk decided in the last week to eliminate almost the entire Supercharger team at Tesla, a person familiar with the matter told Bloomberg News on Tuesday. The CEO hasn’t publicly confirmed the move or offered a rationale, but has said the company will slow the expansion of its charging network.
In addition to potentially compromising budding partnerships with other carmakers looking to tap Tesla’s chargers, another consequence of Musk’s move may be undercutting Biden’s EV push in the midst of his reelection campaign. Presumptive Republican nominee Donald Trump has repeatedly attacked electric cars on the campaign trail and predicted a “bloodbath” for the auto industry if he isn’t elected.
Tax credits aimed at cultivating a domestic EV and battery manufacturing industry were a key element of Biden’s signature climate bill, the Inflation Reduction Act. His administration also is doling out $7.5 billion toward EV chargers through programs set up by the Bipartisan Infrastructure Law signed during his first year in office.
“In building our EV charging network, we have to ensure that as many chargers work for as many drivers as possible. To that end, @elonmusk will open a big part of @Tesla’s network up to all drivers,” Biden wrote on what was then still Twitter in February 2023. “That’s a big deal, and it’ll make a big difference.”
White House Press Secretary Karine Jean-Pierre declined to comment on Tesla’s decisions specifically, but did point to progress the administration has made in facilitating investment in EV charging infrastructure. She said the US wasn’t relying only on Tesla.
“This is an evolving and competitive market where multiple companies are playing leading roles here,” she said. “It’s not just one company.”
The culling of Tesla’s roughly 500-person Supercharger team throws into question whether the Biden administration will reach its goal to build a nationwide network of half a million EV chargers. Among the personnel dismissed was Rebecca Tinucci, Tesla’s senior director of EV charging and one of its highest-ranking female executives. She played a leading role in forming outside partnerships.
The layoffs have left automakers including General Motors Co., Ford Motor Co. and Rivian Automotive Inc. in the lurch at a critical juncture — their customers were only just starting to get wider access to Tesla’s plugs in the last few months.
Tesla had been building a tidy charging business over more than a decade. BloombergNEF estimates that the company delivered 8% of the public charging electricity demanded globally last year. Before Musk’s surprise decision, the researcher was projecting that Tesla’s annual profit from Supercharging could rise to around $740 million in 2030.
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That level of earnings is now likely out of reach, as BNEF’s estimates assumed Tesla would accelerate the pace of installations through the end of the decade. Musk had given indications this was the plan.
“We strongly believe in helping other car companies to accelerate the EV revolution, and just trying to do the right thing, in general,” the CEO said during an earnings call in July.
Tinucci was one of only two women called on stage during Tesla’s investor day in March of last year. She touted the industry’s lowest deployment costs, saying that the company’s Supercharging hardware and other product lines often were 20% to 70% cheaper than alternatives.
Once Tesla installs a new charging site, it also operates them “really efficiently,” she said, telling investors that the company had cut its cost per kilowatt-hour by 40% over a few years.
Musk said Tuesday he wants to put even more emphasis on better utilizing the network Tesla already has built, writing on his social media service now called X that Tesla will “focus on 100% uptime and expansion of existing locations.”
After some X users questioned whether Tesla will follow through with plans to plug holes in its charging network, Musk went into damage-control mode.
“It’s definitely going to open,” he wrote of a charging site in Montana. “Sites under construction will be completed and we will add additional Superchargers anywhere where there are gaps.”
--With assistance from Dana Hull, Ed Ludlow, Keith Naughton and Michelle Jamrisko.
(Updates with White House Press Secretary’s comment in the sixth paragraph.)
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