Extreme Temperature Diary- Monday May 6th, 2024/Main Topic: Tesla’s Retreat from Building Chargings Stations Will Slow EV Growth in U.S.

Tesla retreat from EV charging leaves U.S. network in doubt – The Washington Post

Tesla retreat from EV charging leaves growth of U.S. network in doubt

Sudden layoffs this week left Tesla construction vendors uncertain whether to carry on with the charging projects they were building.

By Jeanne WhalenTrisha Thadani and Faiz Siddiqui

Tesla’s abrupt decision to lay off its electric-vehicle charging team and reduce its investments in public charging is a blow to the U.S. network, which has long relied on Elon Musk to build the bulk of the country’s fast chargers.

The sudden layoffs this week left Tesla construction vendors uncertain whether to carry on with the charging projects they were building, though one vendor said the company has since confirmed that existing projects should continue.

Tesla owns and operates nearly two-thirds of the fast charging ports in the United States and deploys more chargers each year than all other providers combined, according to the data firm EVAdoption. An unexpected retreat by Tesla could undermine the Biden administration’s pledge to rapidly expand the U.S. network.

Many other automakers and companies are investing in U.S. charging, but none so far at the scale Tesla had been pursuing, analysts said.

“If Tesla slows down, these other companies will pick up some of the slack but not all of it. Because Tesla just deploys charging stations at another level,” said Loren McDonald, chief executive of EVAdoption.

Asked about Tesla’s decision this week, White House press secretary Karine Jean-Pierre said more than 40 companies have announced new investments in charging infrastructure under the Biden administration. “This is an evolving and competitive market where multiple companies are playing leading roles here. It’s not just one company,” she said.

The administration championed legislation in Congress that allocated $7.5 billion over five years to fund construction of public charging stations. Tesla has won funding for more sites than any other company — 69 to date — and captured about nine percent of the money awarded so far, according to EVAdoption.

Tesla chief executive Musk did not address the layoffs directly in a post on X, but he said the company “still plans to grow the Supercharger network, just at a slower pace for new locations and more focus on 100% uptime and expansion of existing locations.”

Tesla did not respond to a request for comment or publicly confirm the layoffs, but several affected employees confirmed details.

In a social media post, Lane Chaplin, a former employee of the charging unit, said he learned “in the middle of the night” that “the Tesla Charging org is no more.” One former employee, who spoke to The Washington Post on the condition of anonymity to discuss a sensitive matter, said roughly 500 people on the team were laid off.

The former employee said the layoff notice arrived around 12:30 a.m. Pacific time, while many workers were asleep. Workers awoke to see their jobs had been cut.

“As part of our effort to reduce costs and head count globally your position has unfortunately been eliminated,” the email from the company read. The former employee said it was workers’ understanding that Musk had met privately this week with Tesla’s senior director of EV charging, Rebecca Tinucci. A layoff of this magnitude would not have been Tinucci’s idea, the person said, adding that Tinucci was no longer with the company. Tinucci didn’t immediately respond to a request for comment.

One contractor who installs and maintains charging stations for Tesla said his team heard about the layoffs as they were heading to a worksite this week. A laid-off Tesla employee told the contractor that workers should go home and that the company would be in touch, Andrés Pinter, co-chief executive of Bullet EV Charging Solutions, said by phone. A flurry of Bullet emails to Tesla contacts bounced back.

About 24 hours after the laid-off Tesla employee reached out, a different division of Tesla got in touch and assured Bullet that work would resume on active construction sites, and that “they have every intention of paying us for the work we have done,” Pinter said. Tesla also indicated that it intends to move ahead with sites it has ordered from Bullet where work has not yet begun, in Texas, California and Colorado, he said.

The news casts confusion on the deals Tesla has been striking to open part of its charging network to drivers of other brands, including Ford, General Motors, Volkswagen and others. Tesla did this to become eligible to tap some of the $7.5 billion in federal funding for new charger construction.

“If you fire the whole team, now all of a sudden when GM or Stellantis or VW want to start enabling Supercharging for their customers, there is nobody at Tesla making sure the lights stay on,” said Sam Abuelsamid, a charging expert at Guidehouse Insights.

U.S. drivers say that a dearth of reliable public charging is one of the main factors holding them back from buying EVs. Gabe Klein, who is helping oversee the federal charging push as executive director of the Joint Office of Energy and Transportation, says the administration remains committed to its goal of building 500,000 public charging ports by 2030. There are 183,000 today, and Klein said providers are adding thousands each month.

One of the biggest new investors is Ionna, a consortium of seven automakers that plans to add 30,000 fast chargers in urban areas and along highways. With all the Tesla layoffs, there is now a slew of charging expertise available for other providers to snap up, said Nick Nigro, founder of Atlas Public Policy.

Tesla’s charging layoffs come at a tumultuous time for the company, which has been struggling with falling sales, stiff competition from China and overall uncertainty over its business outlook. Last month, Tesla notified employees that it was shedding 10% of its staff worldwide, stoking concerns about the prospects of a company that is considered a bellwether for the state of the EV market.

In its first-quarter earnings report last week, the company posted a steeper-than-expected 55 percent plunge in profit, which Musk largely attributed to cooling demand in the EV industry overall. Musk attempted to calm investors by declaring a flurry of bold commitments, including a ramped-up production timeline of a more “affordable” car, doubling down on the creation of a fully autonomous robotaxi and outlining nearly $1 billion in cost savings from job cuts.

Musk told investors that he expects sales to rebound later this year, and that he is confident autonomous and electric vehicles “will ultimately dominate the market.”

“In the future, gasoline cars that are not autonomous will be like riding a horse and using a flip phone,” he said.

But the dramatic staff reductions have stoked skepticism over how the company will execute on its ambitious promises. The cuts announced last month affected more than 14,000 workers from departments including sales, engineering and policy. More than 3,300 of those cuts were in California alone, according to state filings.

By Jeanne WhalenJeanne Whalen is a reporter covering business around the world. She previously reported for the Wall Street Journal from New York, London and Moscow.  Twitter

By Trisha ThadaniTrisha Thadani joined The Washington Post in 2023 from the San Francisco Chronicle. She covers the technology industry. Twitter

By Faiz SiddiquiFaiz Siddiqui is a technology reporter with The Washington Post’s Business Desk covering companies such as Tesla and Twitter. His area of coverage has also included ride-hailing and the race to build autonomous cars. Prior to that, he covered the D.C. Metro and local transportation scene. Twitter

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