Execs & Cons of Tesla Supercharging Adjustments

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As you’ve absolutely heard, Tesla has laid off 500 workers within the Supercharging division, the vast majority of its Supercharger staff. Upon the sudden information, numerous causes had been put forth for why Elon Musk might need laid all of them off. Reportedly, the core purpose was that at a time when Musk needed the heads of Tesla’s completely different enterprise divisions to maintain no various crucial workers and lay off the remaining, Rebecca Tinucci, head of the Supercharger division, argued with him about that and didn’t lay off sufficient workers in her division. So, she was fired and 500 Supercharger workers had been instantly laid off to indicate what occurs if you dissent in an organization that … encourages discourse, freedom of speech, and questioning the chief?

Anyway, in response to all of the confusion and dialogue across the subject, Musk offered the next replace:

Total, like many others, I discover this determination to be a bit wild, surprising, and regarding. Although, there are execs in addition to cons. I needed to run down an inventory of those as I see them.

Cons?

To begin off, right here’s a remark from a reader: “[T]the remainder of the auto trade is reeling and even speaking about rolling again their NACS commitments. The Supercharger community is Tesla’s largest aggressive benefit, and knee-capping it simply as it’s about to develop into the defacto charging community for the entire nation is insane.”

One other reader states: “With tons of of tens of millions in NEVI cash on the desk for chargers, with essentially the most dependable and value efficient chargers, together with your fired man negotiating contracts with all the main and minor makers for adoption, a slowdown proper now could be, uh, like 4 dimensional chess dude.”

Right here’s my checklist:

• The Supercharger community has lengthy been a crucial aggressive benefit for the corporate (our authentic analysis surveying 1000’s of EV house owners for years has proven this, however so does widespread sense at this level). The community drives gross sales as a consequence of its breadth, reliability, and ease of use. Stalling its development isn’t going to assist client demand. Even simply from a PR perspective, this hurts the Tesla model.
• Most automakers have now jumped in with Tesla on Supercharging, however, for essentially the most half, the partnerships are hardly off the bottom. Saying now “meh, we’re not going to increase as a lot as we’ve been” should present a little bit little bit of concern, and contemplating most of those automakers haven’t really gotten EVs made but to naturally connect with Superchargers, who is aware of if some is likely to be tempted to alter course? Why does it matter? Frankly, Tesla can alter pricing on Superchargers to make this a notable revenue middle, and it shouldn’t be leaving a giant opening for the competitors to return in and compete with the community Tesla’s been constructing out. As one other reader, Matt Fulkerson, says beautifully, “Observe that Tesla, if Elon would solely embrace it!, has a close to monopoly on dependable quick charging in North America. And may suck up costumers from different producers. That Elon is now forgoing this, after making offers relating to NACS, solely exhibits his instability.” It’s onerous to even think about arguments to that.
• There are nonetheless a number of gaps within the community. There are nonetheless a number of locations the place it might be handy and useful to have Superchargers. Now, the staff of tons of of people that have been doing so effectively at filling these gaps appears to have been indiscriminately hacked off.
• Total, it simply looks like a spiteful, reactionary, determined transfer from a dictatorial CEO. It doesn’t appear useful for worker morale (together with supervisor morale and motivation) or the corporate’s repute.

Execs?

To begin off this part, that is an fascinating one from a reader, Troy Frank: “Tesla’s cost plug (NACS) is now the usual. Tesla has began letting others use their plug/stations. Why would they proceed spending a number of assets making issues higher for his or her opponents. Higher to make the remainder of the trade foot extra of the invoice for future enlargement of chargers. Tesla has already spent a ton over the past 10+ years on this.”

• As Troy says, Tesla has invested a ton into this community, and now that others can principally set up Superchargers with completely different branding however the identical {hardware}, why not allow them to decide up the shovel and do the work? (One counterpoint to this, although, is that it received’t assure the identical stage of software program, comfort, upkeep, or reliability. Additionally, as famous above, it takes away a possible revenue supply.)
• I do really suppose it’s extra necessary for Tesla so as to add stalls at present stations and guarantee uptime as high priorities. I’ve pushed to Orlando a couple of occasions with my Tesla, and there are tons of Supercharger stations there, however they sometimes don’t have a number of stalls, so you need to kind of guess which station will make sure you have open stalls. I’ve needed to briefly wait at stations there. If in case you have 40 stalls at a station as an alternative of 10, you might be fairly certain that’s the place you’re going to cease and never be messing round checking stations and availability whereas driving. (That stated, including stalls isn’t at all times attainable. There are numerous instances the place stations are maxed out by way of both parking availability or energy capability.)
• Possibly there was some bloat within the Supercharging division and it wanted to be cleared out and made extra environment friendly. (Although, the best way this reportedly occurred makes it sound extra like a reckless mass sacking than a surgical transfer.)
• As I reported just lately (only one week in the past), Tesla Supercharger stations had been nonetheless rising robust in Q1. In actual fact, within the face of gross sales decline, there was a giant mismatch. The variety of Tesla Supercharger stations rose 26% from Q1 2023 to Q1 2024, and the variety of Tesla Supercharger connectors rose 27% from Q1 2023 to Q1 2024. I even famous on the time that I used to be skeptical we’d see such development within the subsequent quarter contemplating the entire value reducing Tesla was doing. Right here’s what I wrote: “Frankly, percentage-wise, Tesla’s automobile fleet didn’t develop practically as a lot because the variety of Superchargers, service automobiles, and Tesla places did. So, that’s an ideal signal for anybody involved about ongoing Supercharger and repair availability. What is going to occur on this quarter (Q2) with Tesla reducing prices so dramatically? Will Supercharger development, service fleet development, and site development all come to a halt as effectively? Will they plow on as they’ve been? One thing in between?” I believe we bought our reply.

I will even be aware that I believe Elon Musk will change course on the Supercharger plans once more sooner or later as Tesla’s money stream will get in higher order (assuming it does get in higher order). It’s kind of like what occurred a number of years in the past when Tesla bumped into monetary hassle and stated it was closing all of its shops … earlier than shortly altering course and rising shops once more. That appeared further nuts, whereas this simply appears semi nuts, and so long as gross sales, income, & revenue development return, I think about Supercharger station development will return. That stated, I do not know what number of of these ~500 laid off employees come again to assist, and I’m unsure effectively and successfully the corporate will get again on observe with all of that have gone.

Total, I believe this modification is a case of “reducing off one’s nostril to spite their face.” I do see some positives, however it feels extra like a determined transfer that smashes Tesla’s picture, client demand, and rising partnerships than a effectively thought out and deliberate course change. We’ll need to see how issues evolve now.