Did Elon Cut Tesla Supercharging as a Power Move?

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There has been a lot of speculation about why Tesla cut the 500 person team for Tesla Supercharging infrastructure. Patrick Bet David, successful entrepreneur, podcaster and youtuber has posted the case that Elon Musk cut the Tesla Supercharging infrastructure team and slowed/paused Supercharging network buildout as a power move to get concessions and leverage over other car makers and the government.

Tesla Has to Focus Everything on AI – FSD, Robotaxi and Teslabot

This move could save Tesla $200-300 million per year in expenses if this was for North America only and maybe $600 million if it was globally. Tesla needs to focus capital and research spending on AI (full self driving and robotaxi and teslabot). AI success in the next two years could triple of 10X the value of Tesla. If there was a 2 year pause in supercharging infrastructure then Tesla does not go to 78,000 charging connections but stays at 57,000. However, Tesla has about 25% of its chargers more fully subsidized in North America. Tesla would not pull back construction to zero but to the levels supported by the US, US states and in other countries. Tesla would also continue to build out charging network where it is needed to support their own customers and where there is very good government grant support.

Tesla Will Meet Obligations But Could Ration

All North America carmakers need the Tesla Supercharging network as all other EV charging is vastly inferior. The other chargers are frequently broken.

Tesla has been awarded $28 million-worth of federal contracts for superchargers. This is 14% of the total awards, according to data from EVAdoption, a data consulting firm. Joint Office of Energy and Transportation, which runs the National Electric Vehicle Infrastructure program, or NEVI, said 10 states have selected Tesla as a charging provider for their projects. President Biden had promised build 500,000 electric vehicle charging stations in the United States by 2030. In March 2024, more than two years after Congress allocated $7.5 billion to help build out those stations, only 7 EV charging stations (with 36 ports) are operational across four states. $5 billion was allocated to individual states in so-called formula funding to build a network of fast chargers along major highways in the National Electric Vehicle Infrastructure, or NEVI, program.

In 2023, there were various reports from publicly reported supercharging bids that Tesla build supercharging ports from $19000 to 43000 per port while competitors cost $100,000 to 200,000. We could assume the average cost for a Tesla supercharging port is $30,000 and $150,000 for other competitors.

$28 million of awards would be enough for 900-1000 Tesla supercharging ports. $172 million of federal and state contract for other superchargers at $150,000 a piece would be be 1200 superchargers. $172 million is being wasted on unreliable charging that is five times more expensive.

Tesla added 12000 charging connection ports globally over the last 12 months. If 4000 of those were in North America then this would be $120 million for the US buildout and another $100 million for the 500 staff of the charging infrastructure team.

Tesla’s existing 20,000 supercharging ports are not at 100% utilization. Tesla can use its app and flexible hourly and load dependent pricing to encourage usage at non-peak hours.

Warren Redlich discussed how Tesla can choose to use night time charging if they launch a robotaxi fleet. Tesla supports 2 million cars in the USA now and could support 500,000 robotaxi with night time charging.

Tesla can also ration its available capacity. Tesla can increase prices for non-Tesla cars. This makes people charge at home more often.

If this reduced experience impacts other EV makers they will have to pay and get better terms in other ways. It would take more than five years for the alternatives to become a real alternative or threat to Tesla’s charging dominance.

Pay Tesla More of the Grants to 5X the Results

Tesla has built out four times as many superchargers as funded by the federal and state NEVI contracts. Tesla has built more effective superchargers than all competitors combined. Tesla has made about 70% of the superchargers in California. If Tesla kept its full supercharging infrastructure team and built out in the US as they had for the last year. In 2026, Tesla would have 28,000 superchargers and would have spent an extra $500-600 million. If most of the team is gone then Tesla builds 1000 for contracts but has the least team needed to do it. Tesla still has capacity at the 20,000 existing superchargers and could add 2000 or some other number based on contracts. If the governments choose to keep up the pace of build then they could award more of the $7.3 billion that has not been awarded.

If Tesla keeps the cost per supercharging connection port to $20000 each and the $7.3 billion funded $15,000 of the cost then Tesla could complete the 500,000 supercharger connection goal $2.5 billion in spending. The federal government funding other providers will end up with about 100,000 chargers if $75000 was needed to pay half of the competitors costs.

In California, there are 105,000 electric chargers for the public and about 10,000 of those are fast charging stations. Fast charging stations are the main ones that are usable and really only the Tesla superchargers are convenient and reliable. A non-fast charger would need 2-4 hours for a charge versus 15 minutes for supercharging.

As of April 2024, California has 448 Tesla Supercharger stations with 6,913 charging ports. This is the highest number of stations and ports in the United States, which has 2,128 locations and 20,040 ports as of January 2024. This is about 35% of Tesla’s global superchargers.

In February 2024, the California Energy Commission (CEC) approved a $1.9 billion investment plan that advances the state’s electric vehicle (EV) charging and hydrogen refueling goals. This funding builds on $1.8 billion already invested and will help deploy 40,000 new public EV chargers statewide and other zero-emission vehicle (ZEV) infrastructure across California, creating the most extensive charging and hydrogen refueling network in the country. The investments are part of Governor Gavin Newsom’s unprecedented $10 billion budget for ZEVs.

Funding of $600 million for California’s state’s electric vehicle rebate program, Clean Cars 4 All and EV charging stations would be delayed by three years. The proposal also cuts $283 million from building decarbonization programs.

17 thoughts on “Did Elon Cut Tesla Supercharging as a Power Move?”

  1. PBD is not a “successful” business man, the way Elon or any real business person. He is essentially ran a pyramid scheme, AKA multi level marketing. There are far better sources for various theories.

  3. Some bad decisions by Tesla. Young people, talented who want to work for Tesla got internships canceled. Some of them had already spend a lot to get a place to stay,…

    Not a good way to do things for a long term.

    • Take it up with Biden’s cronies and the state regulators who refuse to fund more Tesla superchargers, almost all due to political considerations – with no concern for taxpayers or EV owners.

      These interns and employees have be informed on who is really to blame. Trust me, higher-ups at Tesla made contact with all of them to explain it.

      Get over your hate for Elon…

      • See IRA Act. Tesla and charging got an immense shot in the arm. Your political blinders are blocking your from seeing the facts.

      • Nonsense I don’t hate Elon. That is just your total garbage. I just criticize some of his decisions I don’t see as good.

        I don’t trust you, why would I?

        Trump and his corrupt elite cronies ( all the time on the courts, some of them in jail) are pro big oil. Don’t forget that corrupt Trump was removing restrictions on restricted natural parks to allow oil drilling,… Democratic Obama admin helped Musk with SpaceX so they could succeed.

  4. Brian, you need to stop defending this horrible decision as some kind of brilliant strategic business move. It is sheer madness to kneecap a service which drew your customers to you in the first place. Tesla owners know and can depend upon the supercharger network being there, and being reliable, as opposed to all the other EV charging companies. Customers with lost confidence don’t make good future customers. Additionally, prospective EV owners who celebrated the idea of supercharger sites being open to other car brands are now reconsidering an EV purchase. Musk single handily broke the EV market future momentum.

    • Your hatred for Musk, due soley to political ideology, is illogical and emotionally immature.

      Tesla did not ‘single-handedly break the EV market future momentum’. Aside from China and Kia/Hyundai, all EV manufacturers have pulled back on EV production. Rivian is the equivalent of Junk Bonds, having to continuously issue new debt to avoid insolvency.

      High interest rates, inflation, and an unparalleled hate campaign against Elon Musk by Democrats are the real culprits putting the brakes on EV adoption…

      • Itd be just as illogical and immature to fail to see Musk’s toxic influence for the sake of political ideology ^H^H^H blaming the Dems.

        At best you might blame the drugs.

        There’s also a non negligible argument for the fact that political ideology roots in morality, which is nothing illogical nor emotionally immature in choosing to dislike someone like Musk.

      • Democrats are stopping EV adoption?!? Who fought for and mandated every piece of EV infrastructure in the US over repeated Republican objections? The Whig party? Your views are so politicized they defy reality.

  5. THE number one thing that people saw was Tesla Chargers. Tesla does not advertise but the huge number of Tesla Charging stations was a clear message that electric cars are coming and Tesla is in the lead. Elon did an incredibly stupid move just to send a “prove I am serious” message to Tesla management to tell them to cut staff. Elon is NOT infallible or all-knowing (Twitter purchase was MORONIC, literally sold Tesla shares for a mediocre social network).
    Elon says he wants “more control of Tesla, upto 25% control).
    WHY? you just demonstrated why you should NOT be given more control.
    Firing a successful unit because the manager is “not taking me serious” is a clear sign that Tesla NEEDS a strong INDEPENDENT board to limit Elon’s control.

  6. This theory of power move is superfluous. Saving the cash for AI compute is more than sufficient reason to cut employees.

    We already know that Tesla will spend 10 billion on AI in 2024, including the HW in the cars. The latter should cost about 2 billion (1k per car). That leaves 8 billion in training HW acquisition and electricity bills. And Tesla may spend even more in 2025, perhaps 20 billion..

    Elon is admirable for drawing the logical conclusions of what needs to be done to reach the goal of a working FSD SW and a working Optimus robot. Other CEOs would play it safe and make token efforts and then, predictably, give up.

  7. Leverage, hunh?

    There’s a reason Detroit never owned the fuel stack. They certainly salivated over the prospect.

    The American people have a power move here too. Anti-trust tying enforcement.

  8. There’s no sense overanalyzing it. Superchargers was 500 people in a 140,000 person company.

    Elon likely believes he can quickly rebuild the group if needed, so he thinks these cuts are inconsequential. They’re a symbol to motivate others to hit their 10% layoff targets.

  9. We were working with Tesla to place chargers at several of our commercial properties… for free I might add, no ground lease rent… and several sites had been approved and now we’re just left in limbo. Nobody to contact. We have no idea whether or not Tesla is moving forward with building the chargers. We are in total limbo. Very unprofessional.

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