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  • Writer's pictureRiccardo Pagliarella

NACS - Not another charging standard!

Updated: Jun 30, 2023

Key points:

  • Since the US announcement of US$5 billion in funding for CCS (Type 1) EV charging, automakers such as Ford, GM, Volvo and Rivian have announced they will also incorporate Tesla's NACS connector. This signifies a significant power shift in US industry, regulation and policy.

  • Tesla’s charging network provides a leading consumer experience. Tesla is advantaged by being a bold, early mover. Its significant investment in charging sets the standard for good public charging experiences.

  • While Tesla’s physical plug standard is ‘open’, it is unclear how backend interoperability will support a positive consumer experience as the industry matures. There are also competition risks associated with Tesla reinforcing a near-monopoly position in relation to data analytics and other factors.

  • Australia has followed Europe in adopting the CCS2 connector, even for Tesla vehicles. While there are no signs of that changing, the US experience offers important lessons about the need to provide consumers with leading vehicle charging experiences.


Where it started


Tesla started development of the Model S (first to use its connector standard) in the late 2000's as a small company employing under 1,000 through 2010. These were early, important days for modern charging standards. CHAdeMO did DC-fast; the Combined Charging System (CCS) was accepted as a proposal in 2011 with first stations in Germany in 2013 after the Model S started production. In North America the first Tesla Supercharger stations went live in September 2012 with Tesla still a small company - now under 3,000 people through 2012 - competing against a charging standard supported by Audi, BMW, Daimler, Ford, GM, Porsche and VW who didn't quite make EVs yet but saw a need to plan.


At that time:

  • They had a limited interest in making it inexpensively, whereas Tesla had a relatively pressing needed to manage costs,

  • Only Tesla would have been banking their livelihood on CCS, which was not yet final, and

  • A lot of the adjacent digital infrastructure needed to make for a decent charging experience didn't really exist.

That last point is important. Today, millions of EVSEs run Open Charge Point Protocol (OCPP) which was started in 2009 by a coalition of Dutch energy distributors trialling early public charging networks. They coordinated EVSE manufacturers by having them integrate on one protocol which they'd author and maintain, though at the time the resulting application set was relatively limited reflecting the early, trial nature of these endeavours. That contrasts sharply with "Silicon Valley startup just bet the house on trying to build a production EV, can do its own coding rather well, needs to move pretty bloody quickly on getting this right to survive and proliferate".


No other vehicle manufacturer was reliant on a charging connector for their entire product line. Usually, a specialist connector manufacturer (because designing connectors is not trivial) proposes a design to a group (often a standards body) that identifies a need, which if accepted, gives them some solid near-term revenues in having not-quite-a-mortgage on manufacturing their design IP.


Tesla then had a market cap under $6B. The combined value of the seven firms attempting to dictate a standards future at their own (slower) pace was over 60x that of Tesla back then. They were stable businesses with hundreds of combined years of industry experience. Whilst those tables have turned (considerably) since, if this was your reality and you were Tesla, would you have come out with your own connector back then?


I think you'd have a harder time making a cogent argument not to.


And CHAdeMO?


CHAdeMO - born out of trial work from 2006-or-so with first cars launched in 2009 and the CHAdeMO association in 2010 - was a non-starter for Tesla.


Despite being both the first 'real' DC charging standard with 'big power' and (from 2014) bidirectional charging, it was an expensive connector with more pins than needed for modern charging communications. Back then, the CHAdeMO communications roadmap didn't support the applications needed for modern EVs (and in some ways it still doesn't).

It's also DC-only, which would have meant two plugs when Tesla sought one.



But Tesla's way didn't work for everyone else


Tesla's plug was a clean-sheet design, just like Mennekes' "Type 2" design proposed in 2009 (now IEC 62196).


Conversely, SAE J1772 (Type 1) had an important legacy in North America as a connector and communications standard. J1772 traces its roots to the original California Air Resources Board (CARB) zero emissions vehicle in the 90's which gave us cars including GM's EV1 (which used J1773, an inductive design) and a subsequent mandate to use conductive charging (J1772). As far as "North American Charging Standards" go, SAE J1772 has existed for nearly three decades, predating Tesla as a corporate entity.


There were some 12,000 public and workplace charging points in the US at the end of 2012, serving a nascent PHEV+EV market – the vast majority of which weren't Tesla. Early Charge Point Operators (CPOs) like ChargePoint were doing fine serving vehicle OEMs and customers J1772 and/or CHAdeMO solutions. In 2012 a Nissan LEAF cost half as much as a base-model Tesla Model S and came from an established brand, attracting different customers in different ways - other car companies at the time didn't need a bespoke charging network to sell cars, and any consideration of using Tesla's would have been tempered by Tesla's limited corporate size and maturity at the time.


European regulators arguably saw what could happen - confusion in market, investment inefficiencies - and mandated CCS as a regional charging system standard from 2013. This defined the Type 2 combo connector in that market and supported three-phase AC charging, a regional need. For 10 years now, EU connector requirements have been clear.


Other markets followed suit, some with CCS and others went different ways (e.g., Japan with CHAdeMO+J1772 and China with GB/T). These choices in charging systems went deeper than connectors alone and reflected roadmaps for signalling, communications, security, application features, stakeholder interests.


It's now 2013 and things are starting to get serious.


Interoperability is a special thing


Whilst Telsa determined to technically solve all consumer-relevant angles on EV charging by and for themselves:

  • Most other companies able to bring EVs to market weren't - and still aren't - well-placed to offer everything (charging infrastructure, backend services, application development etc) given their own resources and competencies.

  • Most markets cannot sustain multiple proprietary, vertically-integrated systems (think Apple, Android and what happened to Blackberry) - it's neither in consumer interests for every player in the market to create their own, proprietary dependencies.

  • Many consumers want, and reasonably expect, products and services they procure that do one thing in a value chain, to work perfectly well with other products and services from other vendors that fulfil other roles in that same value chain.

Tesla is not the EV, EV charging system or EV charging connector market - they are one (prolific) participant. The best intent for a market should include uplifting all market participants towards a range of solutions competing for consumer interests, with competition driving better solutions, affordability and access equality. To these ends interoperability is important. It creates consumer assurance with respect to the applicability and longevity of their investments, and mitigates resource asymmetries and market power among market participants. This is necessary in creating a competitive market that can evolve in line with consumer interests over time.


Charging systems comprise a great deal more than a connector. There is signalling, EV-to-EVSE comms, EVSE-to-backend comms, roaming standards - some of which (e.g., security and cost recovery solutions) are complex and important, and represent significant workstreams across a broad and deep industry base wherein stakeholders each vary in their own skills, depth and maturity. It isn't surprising that Tesla leads the market today, partly as it is intrinsically easier to design and build solutions that serves a single stakeholder.


After the recent US National Electric Vehicle Infrastructure (NEVI) guidelines linked funding for public EVSEs to interoperability requirements made clear future funding directions supporting CCS Type 1, Tesla expressed alignment (it's entirely plausible that discussions with government bodies had commenced prior).


What happened next?


Tesla built cars which people loved, demand for Tesla increased and, in turn, Tesla built out it's charging network. Tesla learned a great deal about how consumers charge, and developed both applications and backend framework to support the needs of its consumers relatively quickly. They developed mature, high-level communications well ahead of market.


Tesla was able to defer many challenges facing industry today, for instance:

  • Cost recovery wasn't necessary when bundling free charging - this came later, simplified by a customer agreement with a a single business interest.

  • Customer data management is vastly simplified when contracts, devices and services all pertain to a single vendor.

  • Energy contract management isn't needed - Tesla drivers just pay Tesla!

  • Independent certificate authorities (and all required to interact) are not needed in a single-stakeholder network.

  • Communications are easy when you own every data route, telematics included.

With this focus Tesla progressed an unprecedented degree of vertical integration, consistent with how Tesla was built and survived in its earliest days when suppliers for key EV systems either didn't exist or priced exorbitantly.


Consider the implications of Tesla designing and building each DC-fast EVSE themselves:

  • Design feedback is instant, rather than a request of a third-party organisation.

  • Communications can be designed to suit more targeted needs, rather than relying on protocols which may have been designed for a range of stakeholder outcomes.

  • One company is singularly empowered and incentivised to 'make it work'.

But Tesla is even more vertically-integrated than that: Tesla is the CPO, the Charge Station Management System (CSMS) vendor, the Electric Vehicle Supply Equipment (EVSE) vendor and the EV vendor. It's incentives, abilities and information flows are unparalleled. Nothing in industry competes with the breadth of this ecosystem and, on top of this, Tesla has the largest market share in most EV markets.


Nearly two million Teslas sold today plus EVSE, CSMS and CPO ownership feeds a growth of domain knowledge that is, and will likely remain, world-leading. As it should be. Tesla took the risks alone and owns the rewards accordingly. It's why so many government-funded schemes for EV charging globally do (or should) ensure that Tesla is included among their scope - they're (without question) the industry's North Star in service quality - and sharing vehicle charging insights with governments will absolutely benefit the EV industry and its consumers.


Image source: Tesla's North American Charging Standard



But what of Tesla's connector


The physical connector does not affect the quality of service outcomes. Tesla uses the CCS2 connector in markets that require it, and its service experience is leading in those markets too.


It is not better but different: it is smaller, which has some handling advantages though none having proven definitively make-or-break for market. Costs are unlikely to significantly differ given similar design challenges to incumbent solutions (e.g., high-current charging incurs costs in managing heat in any connector).


In practice maximum power levels are (currently and for the near term) comparable in market. Whilst Tesla has claimed 1MW+ with a mechanically-compatible connector:

  • This isn't (yet or foreseeable) relevant for cars,

  • Similar developments are possible with CCS along a similar feature path (e.g., thermal limits/thermal management, conductor thickness, line voltage, etc),

  • There are competitive solutions for commercial vehicles,

  • There is no provision for three-phase AC which has limited market application in North America.


Pinswappery


Critically, Tesla's use of the same pins for AC or DC is broadly unique throughout the industry. It has catastrophic failure modes if it goes wrong (which Tesla abates with various controls). In many industries (automotive included) catastrophic failure modes are typically managed by redesigning for a solution with less-severe failure modes per a design ethos wherein solutions are engineered for maximum robustness across all stakeholders interacting with a process, component or system. Accordingly, much of industry has favoured putting different currents on unique connector pins.


Tesla went a different way, consistent with its vertical integration across design, integration and customer engagement domains. The end result was as challenging for incumbent industry as other Tesla innovations, like routing all in-car functions of significance through a 17" screen, or building indigenous, digital controls for power electronics.


A decade later the same industry is seeking to emulate Tesla's depth in design and execution ownership, not least as it affords faster product evolution. Accordingly, Tesla's design directions are (more broadly) acceptable in industry than they were a decade ago, with many OEMs now in-sourcing traditionally outsourced capabilities (particularly software, and - in whole or part - many critical EV hardware systems).


So what’s likely to happen in North America?


Tesla's could quickly become the default connector in North America, because:

  • Consumers demand positive charging experiences,

  • EV manufacturers need a quality of charging services to sell EVs, and

  • Tesla's network may offer competitive access and more certainty compared to to-be-expanded networks operated by firms with less data and experience to apply to future innovation.

In North America, accessing the best charging network may mean adopting a different connector.


It is incorrect to view Tesla opening up its network as a move solely to limit the market for CCS1 in North America. The bigger impact may be on 'traditional' CPOs that are not vertically-integrated, or offer the same quality of service at a competitive price? The implications for e.g., VW-group-owned Electrify America are potentially significant.


Removing the need for competitor EV OEMs to become CPOs in their own right in the near and mid term begs the question: what else could Tesla 'enable' in OEM's EV charging value chains? The supply of hardware to effect connector current management (and to defer relevant risk) would be an easy sell, as could be other key EV systems where Tesla is leading. Data capture from other OEM's vehicles could be used to improve charging service experience in much the same way Tesla optimised its own EVSE and EV fleets. There's potential to create deep, complex, strategic relationships and dependencies - to redefine balances of power throughout industry, at least in the near and mid terms.


What of standardisation?


As a check-and-balance against any one organisation centralising power in any industry or market, standardisation is a good thing. Used properly, standards - the certification they require and the stakeholder inclusion they necessitate - make terms of engagement transparent. Organisations like CharIN can promote best industry practices towards consumer advantage.


Whilst it didn't mature sufficiently quickly enough for the current needs of the US market, CCS is considerably broader than just the connector: the high-level comms employed (ISO 15118-2, shortly -20) is many years in development. It is very feature-complete, interoperable and provides a whole-of-industry way forward (there’s V2G support too).


ISO 15118 is a NEVI requirement and it’s completely doable through Tesla's connector. Many organisations in America have committed resources and capabilities to develop its ecosystem. Furthermore, the marginal cost of ISO 15118 on EVSEs is small. Critically (and whilst complex), ISO 15118 was developed through an industry-wide, consultative process: whilst not perfect, there is much good in ISO 15118.


It remains to be seen whether Tesla themselves will run ISO 15118 in future vehicles; there's certainly a future wherein a new CCS variant simply uses the intended high-level communications and Telsa's connector, duly standardised.


Tesla could, however, try to 'blow it all up' and use market volume to force the federal government to reconsider funding terms - after already having some success in promoting connector equality, Tesla could attempt to force out the communications requirements for their own solutions, although this is unlikely to go unchecked. Yet despite CharIN's mandate in proliferating CCS, if considering current market forces, North America today can only be rationalised to a single standard if it's Tesla's. Fast times!


What else is on the line


The CCS-derived Megawatt Charging System (good for 3.75MW, V2G from launch) is nearing finalisation with its first industry presence already in North America. It is a compelling system - more capacious than Tesla's current offering (which could change) in a market known to need 1-3MW solutions. Investment efficiencies around MCS are understandably impaired without a CCS industry - not least as many trucks may have both lower (e.g., CCS, for depot charging) and higher (e.g., MCS, for mid-trip charging) connectors. Whilst debatable whether Tesla can offer a better solution in the space, electric trucking is coming fast in North America and demands investment-efficient charging solutions for EV truck stops having tens-of-MW site reticulation.


Final thoughts


The world was never going have a global EV charging standard within this decade: the world's largest EV market (China) has its own (with an evolving preference for DC charging), Japan is holding firm with CHAdeMO and the power systems of most Europe (and Australia) demand CCS2.


Whilst the CCS1 connector may fade from use in North America this is not necessarily a bad thing - charging connectors will continue to evolve with technological possibility and market needs. There’s been a lot of good work on behind-scenes tech making charging a commonsense, application-rich experience in interoperable ways through all products and for all consumers, which allows many vendors with a disparity of resources, skills and strengths to compete for consumer interest.


Regardless of available technology sets in other markets, the rapid ride of EVs demands a winning charging experience. The North American market may soon set a precedent in just how quickly that can happen.


About me


I worked at Tesla mostly on Model S development and was aware of (not directly involved in) development of Tesla's charging connector, which was done by very smart people - the vast majority of people then at Tesla were very smart; joining Tesla when it was a very small company was a fortunate and unrepeatable experience.


I've since stayed involved in future mobility and have had involvements in various projects around vehicle-grid among other EV projects using a variety of charging standards, frameworks and the like. I'm an Open Charge Alliance technical working group member (for TWGs concerning development of Open Charge Point Protocol). Like many, I've attended some CharIN events and can attest that both the OCA and CharIN also include many very smart people. I develop charge management solutions and consult on matters related and adjacent to vehicle-grid integration, including with enX.

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