By Abhirup Roy and Kevin Krolicki
(Reuters) – A group of major automakers on Wednesday said they were forming a new company to provide electric vehicle charging in the United States, in a challenge to Tesla and a bid to take advantage of Biden administration subsidies.
The group includes General Motors, Stellantis, Hyundai Motor and its Kia affiliate, Honda, BMW and Mercedes Benz , brands representing about half of U.S. vehicle sales but a small share of the EV market dominated by Tesla.
The unusual coalition of competitors said the new joint-venture company would aim to become the leading provider of fast charging in North America with a target of rolling out 30,000 chargers, starting along major highways and in cities.
The automakers did not specify how much they would invest individually or collectively, but said they would be open to additional investment or participation from other companies, including outside the auto industry. A name for the venture was not announced.
“The investment will be far less through this partnership than building individual charging networks,” said Akshay Singh, a partner at consultancy PwC Strategy&. “They also get to control the customer experience and collect data.”
There are more than 30,000 fast-charging machines around the nation. They can cost anywhere from less than $100,000 to more than $200,000 for the most powerful versions.
Industry executives familiar with the cost of chargers said establishing this venture could cost multiple billions of dollars.
Tesla, which accounted for more than 60% of U.S. EV sales last year, has the largest current network of fast-chargers with almost 18,000 Superchargers in the U.S.
Tesla said earlier this year it would open part of that charging network to EVs from rivals in order to be eligible for a share of funding from $7.5 billion in federal subsidies.
Tesla’s lead in building out a network of chargers has given it sway in setting the standard for charging, something smaller charging companies and other EV makers have viewed with concern.
GM, Mercedes and others have signed on to adopt Tesla-developing charging technology from 2025 to get access to some of its Superchargers.
GM previously said it could save $400 million from getting access to Tesla’s network. On Wednesday, it said the new venture was part of its effort to reduce cost and “won’t change GM’s existing commitments or collaborations.”
The other automakers – Stellantis, Hyundai, Honda and BMW – have not committed to the Tesla technology known as the North American Charging Standard (NACS) and have product plans that rely on a rival known as the Combined Charging System (CCS).
The new charging company will support both charging standards but will compete with Tesla’s network.
Ford , which announced its own deal with Tesla in May, said it continues to invest in its own network but declined to say whether it planned to join the new venture.
In a statement, chief executives of the seven auto brands said a charging network built out like gas stations with restrooms, food service and retail operations would support a faster EV rollout with such sales expected would top 50% by 2030.
The new venture would compete against established EV charging companies, including Volkswagen’s Electrify America and EVGo.
Industry officials said the new venture might be structured similar to Ionity, which was founded in 2017 in Europe and counts VW, Daimler, BMW, Ford and Hyundai as members.
Asked whether the new venture would meet resistance from U.S. regulators on antitrust grounds, a spokesman for the group cited the joint statement where the companies said it was subject to regulatory approvals. The Justice Department did not immediately respond to a request for comment.
The Biden administration has set a target of hitting 500,000 chargers by 2030, an almost four-fold increase.
(Reporting by Abhirup Roy in San Francisco, and Kevin Krolicki in Singapore, Additional reporting by Ben Klayman, Paul Lienert and Diane Bartz; Editing by Chizu Nomiyama and Bernadette Baum)
