Supercharger network loses its leadership

Tesla and its Supercharger network is adored and revered by technologists and disrupters, with good reason.

Legacy American and German car companies, the traditional powerhouses of the automotive industry, would not be offering their current diversity of EVs if it weren’t for Tesla. And the proven ability of its Supercharger network.

Graded by investors as the most valuable car company in the world, Tesla could do no wrong during 2022 and 2023. Although some technology deployments have remained problematic (like the AutoPilot self-driving feature), Teslas continued to sell in record numbers.

With the best UX, excellent driving range, and an unrivalled Supercharger network, there is no reason to buy anything but Tesla if you want to own an EV. But that’s changing. Rapidly.

An affordability problem

EV sales growth is slowing, and because Tesla is all-in on EVs, without any hybrid vehicles to offset demand change, it has suffered greatly.

During Q1 of this year, Tesla sales fell by 13%. That’s alarming, especially for a brand which has delivered quarter-upon-quarter of incredible sales momentum.

Tesla owners and brand fans have been enormously tolerant of tardy delivery schedules and overpromises. However, the true market dynamics are that Tesla has an ageing model lineup and no affordable car. In a time of high financing costs and escalated living expenses, the absence of a ‘cheap’ Tesla is problematic.

The mythical Model 2 was supposed to bring Tesla to a crucial $25,000 market this year, but all news of its R&D phasing has disappeared.

Automotive engineering, marketing and sales is a challenging business. During Tesla’s ramp-up phase, Musk has admitted as much, naming it ‘production hell’. However, at a time when the company should be growing and introducing new models, some startling retrenchments have cast doubt about its immediate future, regarding customer experience and product diversity.

Car companies go through waves of retrenchments. It is the nature of industry. When demand suddenly retracts, people are let go. Tesla’s trimmed its headcount by 10%, including several very senior staff.

Sacrificing the Supercharger?

Tesla’s Supercharger network is so good that nearly all other legacy car companies have signed agreements with Tesla to use it.

There can be no more credible approval for the technological superiority of Tesla’s engineering regarding EVs. Problematically, the senior director of Tesla’s Supercharging, Rebecca Tinucci, and most of her team, have been retrenched.

Recharging confidence is an enormous differentiator for Tesla versus other car companies. And any disruption to the integrity of its Supercharger network could make Tesla’s bad sales start for this year even worse.

The other particularly notable Tesla senior staffer to leave is Daniel Ho. The Australian has deep automotive experience gained from his time at Ford. He was also head of new vehicle and product programs at Tesla, where he’d been for a decade. Ho leaving the company at a time when it requires product regeneration is less than ideal.

Can Tesla Supercharge growth – again?

How is the market reacting? There will be broad industry concern regarding any vulnerability of the Supercharger network, which is the only EV recharging service that works as intended.

Legacy car companies have all but ceased trying to solve the recharging problem. They have capitulated to the superiority of Tesla’s solution with a raft of almost concessionary agreements.

Have all the early adopters and Tesla brand fans become owners, limiting the available conquest market for new Teslas? At a time when hybrid powertrains are proving to be a popular choice for customers considering something beyond a traditional petrol or diesel vehicle, is Tesla trapped by a powertrain paradox of its own making?