Tesla’s Texas Charger Grant Applications Fail; It’s Bad For Texas But Reveals Tesla’s Super-Low Costs

A Texas program which gives grants to install fast EV chargers, as long as they support non-Tesla
TSLA
cars got applications by Tesla. This was a first for Tesla in the USA, as their stations normally only charge Tesla cars. Also interesting is the amounts of the grants, which can cover 70% of the cost of the chargers, to a maximum of $150,000 per charger. Tesla’s applications ask for as little as $30,000 per charger, while most other applications are claiming the maximum $150,000 and perhaps cost even more.

Sadly, the grant program only had around $21M, and awarded grants on a first-come, first-served basis to fund 170 chargers at 41 stations, but not to Tesla. Texas appears to have selected the most expensive stations in the worst locations for their money.

From this grant program we can discern:

1. Almost all the grant money appears to go to put stations at existing gas stations, where few are going to prefer to fast charge — perpetuating gasoline thinking.
2. A small number of stations were applied for by the large charging networks Chargepoint and EVgo who also did not make the cut.
3. Tesla had applied for a small portion of the money to build its first 4 stations which will accept non-Tesla cars, but does so at a cost that is only 1/5th of the cost per station of most of the applicants above.
4. Tesla allowing non-Tesla cars at charging stations is a controversial issue in the charging world, and this may be a harbinger or anomaly. Tesla retains many options to assure their cars get the best access.

The rules and lists of applicants for the Texas grant program are available here.

A terrible deal for Texas

It’s disappointing that of the $21M in grant money almost all of it will go for charging at gas stations with chargers that only support about 30% of the EVs on the road. Tesla’s special stations would support 100% of EVs that can do fast charging, and the state could get 4 times as many chargers for their money, if Tesla were willing. The approximately $21M of grant money could have given Texas over 700 Tesla/CCS and CHAdeMO chargers supporting all cars if Tesla were willing, but instead they will get 170 chargers, many in low-use locations, and which can only directly support around 30% of EVs on the road. (Some Tesla drivers have adapters which will allow them to use the stations, and that number will increase.)

The TxVEMP program which administered this money says they prioritized stations along common travel routes, and all stations are within 1/2 mile of a major highway and open 24/7. (Tesla usually follows the same philosophy.) They state that their goal was to provide convenient access and “to ease range anxiety between population centers.” This is also Tesla’s approach, but 700 chargers would have done a great deal more than 170.

What a strange and unproductive result, especially since Tesla has its headquarters in Texas and would presumably get some favor for that.

Tesla chargers accepting non-Teslas?

Tesla has also allowed non-Tesla cars to charge at Tesla superchargers at a tiny number of stations in Norway, the Netherlands and France. In Europe, their chargers are required to use the European CCS2 standard connector used by almost all other cars, instead of Tesla’s own private connector, though it is widely considered superior to the standard.

Tesla built its charging network much earlier than others, and the chargers can only charge Tesla cars. Their network, which has generally been viewed as superior even though it is much older, is very large, fast, reliable and has an extremely easy to use “plug and play” user experience. Tesla claims it sells the electricity at cost, and in fact included free charging for life with early Tesla models. The network was built to sell Teslas, by letting buyers know they could easily take road trips, not to sell electricity as a business. Indeed it is unclear just how viable it is to sell electricity as a business. Rather than thinking of it as a commodity like gasoline, it is more appropriate to consider charging as a service.

Recently, mostly due to the efforts of Electrify America, triggered by Volkswagen’s penalty for the “Dieselgate” scandal, non-Tesla charging has greatly increased. Last year it was reported there are around 7,000 non-Tesla chargers at 3,700 locations compared to 11,000 Tesla chargers at 1,100 locations. (Tesla locations tend to have more chargers and are more heavily used, as 70% of US EV sales are Teslas and the charging network makes Teslas even more popular for road trips.)

There has been a battle over charging plugs, between the Tesla plug and the two “standard” non-Tesla plugs, known as CCS and CHAdeMO. Recently, CCS appears to have won that battle over CHAdeMO. The CCS standard is able to charge certain cars modestly faster than Tesla but they are now generally similar in ability. A small number of CCS cars and stations now even support “plug and play” charging where you just plug in and walk away, with billing being automatic.

Tesla owners previously could purchase an adapter to use CHAdeMO stations. Shortly, Tesla says a cheaper and smaller CCS adapter will be available for most Tesla owners (owners of certain Teslas will need an upgrade to a card in their charging system, with cost unknown but probably around $200.) So Teslas will be able to use all stations, but owners of other cars will only be able to use the CCS stations. That maybe makes it a big deal that some Tesla stations will open that welcome competitor’s cars.

Why Tesla would open up these stations

People have wondered why Tesla would serve these competitor’s cars and give up the large advantage their cars have in fast charging. Tesla runs its network to sell Teslas, not Fords and Polestars. The other networks are run for a variety of other reasons, including:

1. Using funds from the dieselgate penalty
2. Hoping to attract customers to stores
3. Other government subsidies and green credits
4. High stock market aluations for charging companies
5. Partnerships with automakers to help sell cars
6. Sometimes even, to sell electrical energy as a profitable business

Tesla’s reason to support other cars is obvious in this Texas case — the grant money would pay 70% of cost of the station. Tesla is obviously fine with letting other cars come to their stations if they can get grants for 70% on stations that are still good for Tesla customers. They have declared several times they do eventually wish to allow such cars, but have not acted on it in the USA.

Tesla, with its stated goal of accelerating all EV adoption, would probably have made these stations accessible to all cars with only modest priority to Tesla drivers. It is notable that the grant rules could allow them to tweak things to discourage non-Teslas from coming to the stations. In Europe they do charge non-Tesla cars a higher price than they charge Tesla drivers, and this will likely be repeated here. If they wanted to go extreme (and there is no evidence they did) they could do things like:

1. Give priority to Tesla drivers when the station is at high usage, so it is pointless for other drivers to wait in line.
2. Greatly increase the price surcharge for non Teslas during busy times
3. Make all the extra connectors CHAdeMO rather than CCS. CHAdeMO is more limited, and largely used only by the Nissan Leaf, a car that is rarely used for road trips.
4. Install only the same length cables they use for Tesla charging. These cables are very short and only reach a charge port on the corner of the car, which is where Tesla puts it but few others do.

One speculation: Since Tesla asked for stations with 9 and 17 chargers, and they usually do even numbers, they may have intended to add one non-Tesla CCS/CHAdeMO charger, and then make the rest Tesla/CCS. Tesla uses CCS in Europe so their equipment is already able to handle it, but they do not deploy CHAdeMO anywhere except in an adapter that lets Tesla cars use those stations.

The rules require all stations to support the non-Tesla standards but do not require other stations to charge Teslas — though those that want to sell electricity often try to do so anyway, since they are 70% of the cars.

Tesla could pull such tricks but would mostly get negative attention. Some Tesla drivers have expressed concern about having to wait at Tesla stations if non-Tesla cars start using them. Others think it’s a good idea to take in the business and use the money to build even more chargers for everybody. All of this logic is change by grants, of course.

Tesla could also support more cars at its stations by making an adapter for CCS cars to use when they visit. It could and should also supply its opposite adapters for CCS and CHAdeMO to other charging stations, as it’s a win for everybody. The EVgo charging network currently stocks CHAdeMO to Tesla adapters at 400 of their stations to allow Teslas to charge there. (EVgo is one of the few networks that does charging as a business and of course it wants to be able to sell to the vast majority of cars out there.)

Why are Tesla stations hugely cheaper?

The grant applications reveal a staggering difference in the cost of the different stations. Most of the applications ask for the maximum $150,000, which suggests their stations cost at least $215,000 each to put in — and possibly much more. While all the other applications are for smaller stations with 2 to 6 units, and thus have a higher cost per charger, the difference is stark. For the Tesla 17 unit station they ask only $29K each, and $42K each for the 9 unit stations. Tesla’s grant application for their 17 unit station at $500,000 is lower than most of the 4-unit stations in other applications, which ask for the maximum $600,000. Only 20% of the grant was allowed to be used for electrical service upgrades.

Tesla is able to put in stations for less than 1/5th of the cost of many of the players, including Chargepoint, which is the largest of the non-Tesla players and highly experienced, or EVgo which was requesting 4 times the Tesla amount. Both Chargepoint and EVgo make their own stations — most other applications will be buying them from other suppliers and thus can be expected to have somewhat higher costs. But several times as much? The economies of scale of a larger station are quite strong, but not this strong. Of course, Tesla, which does much more business, has better economies of scale, or all the others would be applying to put in bigger stations. Chargepoint and EVgo declined to comment for this story given a week, and they did not win any grants either.

One harsh reality is that non-Tesla stations are still not that busy, which is why they are smaller, but this should change as other OEMs start to increase their own sales. In addition, soon most Teslas will be able to charge at the CCS stations if the Tesla stations get full.

As you might guess, $225,000 or more is quite a lot of money. Most fill-ups are in the range of 50kwh. At a profit of 20 cents/kwh you would have to fill 20,000 cars to pay for such a station. That’s many years before there could be profits unless the station is very busy — which these aren’t. Which is why they want the grants.

Here are the prices in the unaccepted grant applications of various operators, representing up to 70% of the actual cost.

1. Chargepoint: $150K+ for 2-plex
2. EVgo: $150K+ for pair, $126K for 4-plex
3. Circle-K: $75K for 4-plex to $150K+ for 2-plex
4. 7-11: $126K for 2-plex
5. “Retail EV Charging North/South Texas” (Buc-ee’s) $100K/charger for 6-plex
6. Various small players: $75K to $150K, averaging at least $133K/charger
7. Accepted applications so far from various players average $123K+/charger
8. Tesla: $29K for 17-plex, $42K for 9-plex

As noted, the charger itself is not $215K. They are including whole project costs, such as bringing in 300kw to 2mw of power for these stations and the heavy duty gear needed, along with trenching and other construction. It’s unlikely any are including the cost of land but a few might. Usually a lot of the electronics goes in a shared master cabinet. Tesla stations are by far the most common and thus are made in much higher volume — they are also much simpler, with no screens, card readers or anything but the plug, because all authentication, interface and billing is done through the car or app.

Even so, Tesla’s scale shouldn’t make them that much better at this. One wonders if subsidies (not just these grants) are making the price higher than it needs to be, which can actually be harmful rather than helpful.

Most of the grant applications (and accepted grants) are for existing gas stations. Without looking at the particular stations, most such gas stations are poor places to do a fast-charge, as they have very limited food and shopping choices. With gasoline thinking, shopping (at a sucky convenience store) is what you do while you fill, if anything. For an EV, filling is what you do while you shop (or eat.) Most of these are simply not places one would go to spend 40 minutes, unless they happen to have a more attractive neighbor. Many of the locations do feature fast-food chain restaurants, and one even has a Costco — stores like Costco are good choices because their members like to shop there, it takes at least half an hour for most trips, and it’s worth doing at any time in the day. Fast food is a tolerable service, though it is usually only desired at lunch and dinner times, and the quality is at the lower end. A few others have decent retail locations like Target
TGT
and Kroger
KR
nearby, though it would be better to put the charging at these actual retailers rather than a gas station across the street.

Ideal fast charging locations

What might an ideal fast-charging location look like? For road trippers, it’s ideally:

1. A tourist destination they plan to stop at (absent the need to move the car after 40 minutes.)
2. A place with a decent meal that takes 30-50 minutes, but only at lunch and dinner times — if this is the only thing at the site it is not so useful outside those times.
3. A place for road trip supplies (though you usually don’t need to shop for those every day.)
4. Their hotel for the night, if a hotel with slow charging is not available.

For locals who can’t charge at their home or work, and use urban stations, the best locations are:

1. A shopping location they go to 1-2 times/week, such as a grocery store, or store like Target or Costco.
2. Another facility they wish to visit weekly, like a social club or entertainment venue (not for drinking alcohol to above the limit.)
3. A location with high speed internet and desks to get work done on a laptop.
4. For some, a regular coffee shop or similar place they go to 1-2 times/week at varied times of the day and spend 30 minutes.

One also has to factor the need to move the car after charging is complete. If this is required (and it usually is) the task done while charging needs to be one that can be interrupted (and possibly resumed) when the charge completes, and must be within a few minutes walk of the charger. In time, charging stations that don’t meet this requirement must be designed to avoid the need for interruption. (One approach can be to have 4 parking spaces at each charger, and a way that people can move the cord from car to car after one is completed, or to have multiple cords which share the power.)

The challenge is that the above lists are not generally a good match with the location of gas stations. Which makes it a possible issue when almost all of Texas’ $21M in grants is going to gas stations.

This continues the tragedy of funding our EV infrastructure with misguided grants rather than understanding what is actually needed by relying on both market forces and the desires of actual drivers.