Market Insights #27

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Tesla realigns strategy: focuses on existing infrastructure amid $500M expansion despite workforce cuts

Tesla , amid broad downsizing and firing its Supercharger team, is slowing the expansion of its charging network under CEO Elon Musk's direction, focusing on enhancing existing sites. Despite these challenges and significant staff reductions, the company commits to investing over $500 million in 2024 to develop its charging infrastructure, targeting both new and existing locations.

Source: electrive

Gireve’s view: Elon Musk recently decided to lay off employees leading Tesla's EV charging business, as reported on LinkedIn. This move initially caused uncertainty within the EV and charging ecosystem, especially since major automakers like GM and Ford had just made deals to access Tesla's network. Musk later stated on X, "Tesla 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." This marks a significant shift in Tesla's strategy, which had previously focused on rapid network growth in line with US goals to build alternative fuel corridors every 50 miles.

This strategic change emphasizes improving the existing network's quality, enhancing uptime to improve traffic and customer experience. This could lead to higher revenue from optimized customer traffic and better overall profitability. However, the slower expansion might hinder the broader adoption of EVs, despite Tesla's North American Charging Standard (NACS) becoming the continent's official standard. Tesla remains the leading deployer of ultra-fast chargers annually in North America and has built a reliable, powerful network used by both Tesla drivers and owners of other car brands.

On May 10, Elon Musk reiterated on X, "Just to reiterate: Tesla will spend well over $500M expanding our Supercharger network to create thousands of NEW chargers this year. That’s just on new sites and expansions, not counting operations costs, which are much higher." Therefore, Tesla's network will continue to grow. This is positive news for the global EV market, as Tesla's network is considered the gold standard of EV charging. However, the slowdown in expansion could reduce its North American monopoly, allowing new players to emerge for a healthier and more competitive market.

Funding

• Luxembourg funds 434 new EV chargers with €4.8M; 50% subsidy for businesses; another project call from June to October 2024; special SME aid under EU-approved plan. - Source: Ministère de l'Economie

Heavy-duty charging solutions

• Iberdrola and bp to install first megawatt chargers in southern Europe, starting in Murcia, aiming for an emission-free freight route across Spain by 2024. - Source?: El periodico de la energia

• Milence plans a new electric truck charging park in ?desh?g, Sweden, between Stockholm and Malm?, featuring initial 400 kW CCS points and future megawatt charging. - Source?: Milence

Roaming

• Scotland's FOR EV integrates with Zapmap for easy payment across its high-power EV charging network, enhancing user convenience at various destinations. - Source?: Zap Map