⚡️ Did Tesla and CCS just have a baby?

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Here's what we have for you today:

• EV & Charging stock performance

• 1 Pic

• 3 Thoughts

• 2 Links

• Electric Meme of the week

No big news on the stock front this week. The one outlier is Polestar, which went up another 20+% from $6.32/share to $8/share. The company is now up >90% in the last 30 days, from trading at just above $4/share back in October. Remember that past performance is not indicative of future results ;)

1 Pic 🖼

The image above shows a side-by-side comparison of the two main North American fast charging connectors, the Combined Charging System (CCS) connector in grey and the North American Charging Standard (NACS) as published this month by Tesla in a blog post. Notably, CCS was proposed by a coalition of the Society of Automotive engineers (SAE) and the European Automobile Manufacturers Association (ACEA) and is used by every newly launching North American EV - except Tesla. In its blog post Tesla pitched the NACS as the one connector to "rule them all". To that end, Tesla invited other automakers to adopt the Tesla connector inlet on their vehicles and encouraged 3rd party charging networks to add Tesla connector cables to their stations.

3 Questions and some Thoughts 💬

What´s in it for Tesla?

• Switching costs: Tesla has dominant market share on the existing electric vehicle fleet (66%) and fast charging stations (60% compared to CCS) in the US. Therefore, the adoption of CCS would come at significantly higher costs than when Tesla did the switch in Europe back in 2018 (1, 2)

• Innovation & UX: Optimists might say that Tesla simply wants the "best" connector to win, pitching NACS as the objectively better option ("half the size, twice as powerful") for North America. In terms of specs, NACS supports up to 900A/1000V, whereas CCS is currently limited to 500A/1000V.

• Government Funding: Tesla's argument could be that the Tesla connector is now moving from a "proprietary" to a "open standard" classification, which may enhance Tesla`s chances to receive public funding for further build-out of the Supercharger network in North America.

• Utilization of the Supercharger network (SC): The Supercharger network is known for its reliability and premium sites which Tesla was able to acquire because of the first mover advantage. Combined with an attractive pricing proposition as seen in Europe, Tesla will be able to increase the utilization and profitability of the SC network by attracting 3rd party vehicle owners.

Why is Tesla releasing the NACS now?

• Certainly this is the hardest question to answer. To an industry observer, this move might seem a little late in the game. Tesla is throwing the NACS on the field, just as Nissan finally conceded the "Connector Wars" in North America and switched from ChaDeMo to CCS on their newest EV, the Nissan Ariya

Which industry players care about the adoption of the NACS?

• Car OEMs: Tesla positioned NACS as "just a connector" --> According to the technical specification, NACS communication between the vehicle and the charger shall happen via the existing charging protocols used by CCS vehicles like DIN7021 and ISO15118. This would make it easier for carmakers to switch as they would not need to implement a new communication protocol in their vehicles. But will it be enough to overcome "NIH" syndrome?

• Charge Point Operators & Charging Station Manufacturers: 

  • Opportunity: Networks like Electrify America/ Evgo/ Chargepoint could adopt the NACS connector to serve charging needs of Tesla drivers and further increase their network utilization. At least Evgo has already made some moves in that direction.

  • Risk: Either by direct integration of a native NACS inlet on other cars or via CCS-NACS adapters, other cars then Tesla will be enabled to use the SC network which will result in higher competition.

2 Links

• NIO pricing for Europe: When NIO first launched their vehicles in Europe the company only offered them via a subscription model. Based on market feedback, the company is now also introducing purchase options to own their vehicles outright. A few things to note on NIO´s pricing:

  • The NIO ET5 starts at 50k EUR - incl. 19% German VAT. It´s big brother ET7 starts at 70k EUR.

  • Those prices DO NOT include the battery yet. There are two battery options available: A 75kWh batter for 12k EUR, as well as a 100kWh battery for 21k EUR.

  • Alternatively, one can get NIO´s battery subscription ("BaaS" - Battery as a Service), which comes out to 169EUR/mo for 75kWh and 289EUR/mo for 100kWh.

  • NIO´s battery swap stations in Europe will only be available to users with the BaaS subscription. They’ll get two free swaps per month.

• New Audi charging service: In Europe, Audi launched a new public charging product called Audi Charging Service covering 27 European countries. From Jan 1st, 2023 this will replace the e-tron charging service which had been launched in 2018. One thing to note is that Audi switches service providers on the backend here: The new service will be provided by Volkswagen Group Charging (aka Elli), which also provides similar services to other VW Group brands such as VW, Skoda, SEAT and CUPRA. The old service was provided by Digital Charging Solutions, which was a spin-off from BMW Group and now also counts Mercedes and BP among its shareholders.

Meme of the Week

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DISCLAIMER: None of this is financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.