Why is Elon Musk giving up the Supercharger network, one of Tesla’s most important assets?
In a completely unexpected move, Tesla fired its Supercharger team, amounting to roughly 500 people in total. The news broke on Thursday morning, with many employees including Tesla’s supercharging chief Rebecca Tinucci taken by surprise.
Tesla’s supercharging network operates over 50,000 stations globally and is considered one of the company’s main assets.
The electric vehicle maker boasted its network for years as it slashes charging times significantly. Long charging times and lack of proper infrastructure are considered two of the main reasons why electric cars have yet to take off in the general public. Therefore, the supercharging network is arguably part of Tesla’s overwhelming success over the past years.
The company’s CEO Elon Musk said in a post on X that 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.” Elon Musk recently asked for a $47 billion compensation from Tesla’s board.
Tesla laid off 10% of its workforce last month, roughly 14,000 workers. The company’s sales are in steep decline faced with mounting competition from China. Musk is currently engaging in a bloody price war against Chinese competitors, which is also eating into the company’s margins. Tesla posted worse-than-expected quarterly earnings last month.
Why did Musk give the Supercharger up?
Speculations around Musk’s impulsive move fired off immediately after the announcement.
Initially, the Supercharger network was a proprietary Tesla technology. Over the years, however, Tesla opened its network to other American carmakers like Ford and General Motors. This created a new EV charging standard dubbed NACS (North American Charging Standard).
Analysts believe Musk wanted to avoid giving its US competitors an advantage, especially as Tesla goes through a defining period of its existence. Tesla’s chief executives likely don’t consider the Supercharger network a competitive advantage anymore.
James Attwood, acting magazine editor of Autocar, told in a BBC interview that the network was one of Tesla’s key selling points. "But with regulators in both Europe and the US pushing the firm to open the Supercharger network to owners of other electric vehicles,” Attwood added, “it will offer less of an advantage in the future."
Tesla now wants to focus all its energies on self-driving cars, turning it into the company’s new main competitive advantage.
However, Tesla will need other strategies to survive until it reaches full self-driving capabilities. The company has not rolled out a competitive model since 2019, with competition releasing more efficient cars during this period.
Tesla also reportedly scrapped plans for a new cheap EV model, though Musk dismissed these rumors. What Tesla will do to keep its market position remains unclear.
