Elon Musk, Tesla’s chief executive, pleaded with competitors, suppliers and his own employees this week, reversing course on his aggressive push to build electric vehicle chargers in the United States, a major priority of the Biden administration.
Mr Musk’s decision to fire the 500-member team responsible for installing charging stations and to sharply slow investment in new stations has rattled the industry and raised doubts about whether the number of public chargers would grow fast enough to to keep pace with battery car sales. It put the onus on other charging companies, raising questions about whether they can build fast enough to meet a shortage that appears to be discouraging some people from buying electric cars.
As the owner of the largest charging network in the United States, Tesla has a strong influence on people’s views of electric cars.
“There’s definitely a psychological component,” said Robert Zabors, a senior partner at Roland Berger, a consulting firm. “Availability and reliability are critical to overall EV adoption.”
Tesla’s change of direction, just days after it told shareholders in a securities filing that it would “rapidly” expand its charging network, which it calls Superchargers, is likely to delay the construction of fast chargers, which are clustered along two coasts and parts of Texas.
Wildflower, a New York real estate developer, was on the verge of signing a lease with Tesla to build a charging center near the intersection of Interstates 278 and 495 in Queens. Then Adam Gordon, the company’s managing partner, received a text message from the Tesla executive he was working with.
“Hey, I got fired at 4 in the morning and my boss got fired too,” the Tesla manager said, according to Mr. Gordon. “That was the only communication we had from Tesla,” he added.
Another billing company is likely to take over the site, which is licensed to acquire power, Mr. Gordon said. But Tesla’s withdrawal will inevitably delay the project.
No other company has as much experience and expertise as Tesla in installing charging stations, which range from a handful of plugs in the corner of parking lots to dozens of them in special areas, often along highways.
The automotive industry accounts for 25,500 of the 42,000 fast chargers installed in the United States, according to federal government data. A fast charger can fill an electric car battery in 10 minutes to an hour, depending on the car and the charger. There are about 132,000 slower public chargers that can fully recharge electric cars in about eight to 12 hours.
Tesla began building Supercharger stations in 2012 to give Model S sedan owners a place to fuel up on road trips. Buyers of its predecessor, the Roadster sports car, are mostly charging at home.
Other companies may not be able to build chargers as quickly or as cheaply as Tesla, said Daniel Bowermaster, senior director of electric transportation at the Electric Power Research Institute, a nonprofit group in Palo Alto, Calif., where Tesla once had its headquarters.
“There are significant opportunities regardless of what Tesla does,” Mr. Bowermaster said. “It will be dealt with by the market. How do they do it in a timely and cost-effective manner?’
But some in the industry say Tesla won’t be missed as much as it was a few years ago. Government subsidies and private capital are fueling a surge in charger manufacturing that doesn’t depend on Tesla: number of public fast chargers in the United States increased by nearly 11,000, or about 36 percent, from April 2023 to April 2024.
“The public charging experience will become easier,” said Peter Slowik, an automotive expert at the International Council on Clean Transportation, a research organization. “I don’t think the charging market and the electric vehicle market is slowing down because of Tesla.”
Tesla makes charging equipment for Supercharger stations at a plant in Buffalo, which was necessary a few years ago when there weren’t many suppliers. Since then, many companies have started selling charging equipment and the technology has become standardized.
Last year, nearly all major automakers that sell cars in North America agreed to use the Tesla-developed charging plug from 2025, reducing complexity. Electric cars in Europe and China are based on different standards than Tesla uses in North America.
Tesla’s withdrawal “is a normal step of market professionalism,” said Jörg Heue, chief executive of EcoG, a Munich-based company that provides charging software.
Mr. Musk did not explain his reasoning for reducing charger manufacturing, but some analysts said he likely concluded that it would become harder to make money from charging as more companies entered the market.
Tesla does not disclose the financial performance of its charging business, but analysts say it requires capital that Mr. Musk would prefer to invest in artificial intelligence and robotics, which he has said will fuel the company’s future growth.
“My guess is that the electricity and infrastructure costs to run the network far exceed the charges provided by Tesla and other drivers so far,” Ben Rose, president of Battle Road Research, said in an email. “Now they can focus on making the most of what they have installed.”
Tesla did not respond to a request for comment.
Another reason Mr. Musk may be sour on charging is that he may regret Tesla’s decision last year to open its US service stations to vehicles from other manufacturers. By opening the door to Fords, Cadillacs, BMWs and other automakers, Tesla has made it easier for others to sell electric vehicles, which may help those automakers chip away at Tesla’s dominance of the U.S. market.
Mr. Musk’s reasoning “may be that people will use Tesla’s infrastructure and buy another manufacturer’s car,” said Raj Rajkumar, a professor of electrical and computer engineering at Carnegie Mellon University. He added that he sees Mr. Musk’s decision to withdraw the new chargers as a mistake that would make it harder for more car buyers to switch to electric vehicles.
Tesla was one of several companies applying for subsidies under a federal program that aims to operate half a million fast and slow chargers by 2030, up from nearly 200,000 today. Combined with state and local incentives, government money can cover almost the entire cost of a charging station.
“If Tesla no longer bids on these things, the companies that distribute them will go to other operators,” said Badar Khan, chief executive of EVgo, a charging company in Los Angeles. “There are many different participants.”
The 500 employees Tesla laid off will take their expertise elsewhere, Mr. Khan said. “There’s a very talented group of people coming into the market,” he said. “We are currently having conversations with individuals.”
EVgo said in March it had almost 3,000 charging stations by the end of last year, up 37% from the end of 2022.
Utilities, which must upgrade their equipment to support the growth of charging options, said the fast-charging network was just one element of a broader strategy that Tesla’s decision would not change.
“It’s no secret that Tesla is a major player” in electric vehicle charging, said Chanel Parson, director of clean energy and demand response at Southern California Edison, the state’s second-largest utility. But, he added, “he’s not the only player.”
The utility has 500 projects in various stages of development for 14,000 chargers focused on light, medium and heavy vehicles. To reach California’s goal of zero greenhouse gas emissions by 2045, Ms. Parson said, 90 percent of light- and medium-duty vehicles must be electric, along with 80 percent of buses and 54 percent of heavy commercial vehicles.
“And there are a lot of partners in this space that we’re working with to make that happen,” he said.
Government officials responsible for financing and promoting electric vehicles said they were not disappointed by Tesla’s decision to stop charging.
Thousands of chargers are coming online each month, the Biden administration’s Joint Energy and Transportation Office said in a statement, adding: “We do not expect individual business decisions to affect EV charging projects.”