Auto File: The U.S. EV Market: All Aboard for 2025

Joe White

Global Autos Correspondent

Greetings from the Motor City!

Welcome to Friday! You made it! Racing fans are already starting to celebrate the Centennial of the 24 Hours of LeMans. General Motors will enter a special “Garage 56” edition of the Camaro. Is Garage 56 next to Area 51?

“Ford v. Ferrari” fans like me can dig deep into the coverage of that fabled 1966 race while waiting for the start of the 2023 contest. I am intrigued by the “24 Heures Camions” race – European Semis dueling on a track? Sounds like fun. But that isn’t until September. I’ll just have to wait.

You know who else should wait a bit? Americans who are interested in an electric vehicle. I’ll explain why. Today -

• Wall Street loves the Tesla, GM, Ford charging deals

• Mercedes beats Tesla on automated driving

• At Bosch, the car knows you’re drunk

• The Tesla-GM-Ford Charging Alliance

The North American electric vehicle charging business has been until now a fragmented affair. The best charging system, Tesla’s Supercharger network, was more or less a walled garden.

Rival EV manufacturers and the Biden Administration were committed to charging connector hardware that didn’t work with the Tesla network. But the networks those “combined charging standard” or CCS plugs did work with were not that good.

As of Thursday at 4:30 p.m., U.S. Eastern Time, the scene has changed, dramatically.

That’s when General Motors CEO Mary Barra appeared on Twitter Spaces with Tesla’s Elon Musk to announce an agreement that GM will join Ford in adopting Tesla’s North American Charging System (NACS) plug standard starting with GM vehicles built in 2025. Tesla will open 12,000 Superchargers to GM EV drivers starting next year. (GM’s announcement is here.)

Ford announced its deal with Tesla on May 25. Now, the three automakers that currently command about 70% of U.S. EV sales are adopting the Tesla charging system.

The charging standard war in the United States appears to have entered the beginning of its end.

Investors judged it a big win for Tesla that Ford and GM will embrace the Supercharger ecosystem.

As of Thursday’s close, Tesla’s market cap had increased by about $165 billion since the day before the charging alliance with Ford was disclosed. Investors were looking to add another $35 billion to Tesla’s market cap based on pre-market trading Friday. It’s another great day to be Elon Musk.

GM and Ford shares rose as well – though the market caps of the Detroit automakers remain far smaller than Tesla’s. Barra told CNBC GM could save $400 million by allying with Tesla on charging. Not small change.

(The industry and investors would really love a deal to create a global charging standard, but that’s not on the cards yet. Europe has already committed to CCS, Japan uses still another type of plug and a senior Chinese government official said Friday that China should be setting global EV charging standards.)

Shares in rival charging networks, such as ChargePoint and EVgo, sank in early Friday trading. The non-Tesla networks could lose customers, and face extra costs to be compatible with the best-selling EVs in the North American market.

For consumers, the benefits of the Tesla-Ford-GM push to rationalize North American charging fully arrive in 2025, when new GM and Ford EVs will have factory-installed Supercharger compatible connectors. (Starting next year, drivers of GM and Ford EVs can obtain connector adapters to use Superchargers.)

Put another way, if you want an electric Chevy or Ford pickup that can seamlessly get a rapid re-charge at a Tesla Supercharger, wait until 2025. (Here’s a look at the difference between a Tesla plug and a CCS plug.)

The years 2024 and 2025 are critical because that’s when the Detroit automakers plan to launch a wave of next-generation EVs designed to sell at high volume. The muddle over charging standards and charging network quality has been a barrier to wider EV acceptance.

Are there risks for Tesla’s North American market competitors in buying tickets to Elon Musk’s garden? Sure. These deals suggest whatever those risks are, the rewards of removing a consumer pain point and piggybacking on Tesla’s charging investment are greater.

• Essential Reading

• U.S. companies face less ESG pressure

• Lawmakers want to regulate AI

• Could Tesla sell 375,000 Cybertrucks a year?

• Has Carvana steered away from the cliff? Shares in online used car retailer Carvana went vertical on Thursday after the company surprised investors with good news: A forecast of $50 million in pre-tax profits for the second quarter, well more than analysts have been forecasting.

As of Friday morning, Carvana shares were up 56% from Wednesday’s close. Carvana CEO Ernie Garcia, in a presentation Thursday, credited cost-cutting and promised more.

Carvana’s Q2 got a lift from increased sales of car loans to investors. Some analysts worried the Q2 pop is just a one-time gain from that sale of loans. Another caveat: Positive cash flow remains a goal for the future.

• A Mercedes that can drive you to Vegas “We were somewhere around Barstow on the edge of the desert when the drugs kicked in.” But no worries – now the Mercedes can do the driving!

Mercedes scored a coup in its battle with Tesla for California customers, winning approval from the Golden State’s regulators to activate its eyes-off-the road, Level 3 DRIVE PILOT system on highways in the state. Mercedes will start offering the Level 3 system on S-Class sedans and EQS SUVs next year.

Mercedes beat Tesla to this milestone on the road to automated driving. Tesla’s “Full Self Driving” Beta is classified as a Level 2 system requiring driver engagement.

Nevada had earlier granted clearance for the Mercedes DRIVE PILOT system, so now Hunter S. Thompson fans could make the desert dash from Los Angeles to Las Vegas with the help of an always sober German luxury car.

Warning: Drivers still have to be sober because they still are responsible for safely operating the car. So the dope and booze need to stay in the trunk.

• Bosch and the next level of driver monitoring Speaking of dope and booze, German auto tech supplier Bosch is developing a next-generation in-cabin driver monitoring system that fuses camera images and radar data using software that among other things can detect when the driver might be drunk or high.

The system Bosch engineers demonstrated can track eye movements and tell when those movements correspond with the woozy fluttering of someone who’s had too much to drink. It’s a digital version of a cop demanding you track a finger moving back and forth.

The system’s main stated purposes are to monitor when a driver is drowsy or distracted or warn when a child is left in a back seat. Advanced driver monitoring is already a requirement in Europe. The U.S. Congress has passed legislation requiring regulators to consider technology that could intervene to stop drunk driving.

Bottom line: The question is not whether technology exists to closely watch driver behavior and raise red flags when a driver is impaired. It’s who can see those flags and under what conditions.

Another intriguing software product Bosch demonstrated during an event in suburban Detroit: A Vehicle Dynamics Control software suite that can control braking, steering and handling independent of the vehicle’s hardware.

In theory, someday you could download code that delivers the ride and handling characteristics of a late 1990s BMW to your modern electric car. Not that Bosch or any of its customers plans to do that. But they should.

• Britain’s AV dreams fizzle

The United Kingdom aspires to be a hub for self-driving vehicle development and production. But those dreams are at risk because the government has not delivered a promised regulatory framework to allow widespread deployment of automated vehicles on British roads, Reuters correspondents Nick Carey and Alistair Smout report.

Chances look slim, as the government has not put an AV proposal on its near-term list of priorities.

• Fast Laps

China will juice the vehicle market with fresh incentives to get consumers to buy, the government said this week. Beijing wants to pep up a consumer recovery still sluggish after the COVID lockdowns.

Swedish auto supplier Autoliv said it will slash 8,000 jobs.

Electric car startups

Lucid and Fisker separately announced this week they plan to launch sales in China, the most competitive EV market. Zhù Nǐ Hǎo Yùn.

Chinese EV leader BYD is launching a new vehicle brand, Fang Cheng Bao, or Formula Leopard, to sell off-road and sporty cars.

GM will invest $500 million to update the Texas factory that builds its line of large petrol-burning SUVs, including the Cadillac Escalade. This brings to nearly $2.5 billion the total announced investments GM will make to keep combustion trucks and SUVs rolling into the 2030s.

Lordstown Motors said it will sue Apple hardware assembler Foxconn for refusing to go through with a $170 million investment.

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(Editing by Andrew Heavens)