CCS Is Dead in North America as Tesla’s NACS Plug Takes Over

On May 25, Ford announced that it will adopt the North American Charging Standard (NACS) connector in its Electric Vehicles (EVs) from 2025. It will also partner with Tesla to give its customers access to Tesla’s Supercharger network of fast chargers from early 2024. It has since been followed by General Motors (GM), Rivian, Volvo, and, most recently, Mercedes-Benz. With this surprising news, automakers responsible for over 80% of 2022 Battery Electric Vehicle (BEV) sales in the United States will be using NACS, and more are expected to follow as the dominoes fall. This makes NACS the de facto standard for North America and leaves the Combined Charging System (CCS) Combo 1 set to be phased out. Currently, the only cars using the NACS plug are Tesla’s own vehicles, but these account for 72% of U.S. BEV sales in the last 5 years, meaning it is already the leading solution by installed base.

The moves of these Original Equipment Manufacturers (OEMs) have been responded to by EV Charging Point Operators (CPOs) in the U.S., which have announced their own plans to offer NACS plugs on their chargers, including ChargePoint, EVgo, and Blink. The most significant acquiescence comes from Electrify America, the Volkswagen subsidiary that claims to operate the “largest open DC fast charging network in the U.S.”, a title we can expect it to lose as Tesla’s Supercharger network opens to NACS-compatible vehicles from other OEMs.

EV charger manufacturers have also pivoted quickly and announced that they will be offering NACS plugs as an option for their products. ABB, Tritium, and ADS-TEC are among those that have already publicly stated their intention to adopt NACS, and the rest will do the same. State governments have also been paying attention: Texas and Washington will require charging sites to include NACS plugs to be eligible to receive federal dollars. Within a few weeks, the entire American EV charging ecosystem has realigned toward NACS, in preparation for the transition that will begin in 2025 when it will be the default port for most, if not all new EVs.

Access to the Supercharger network is a big win for non-Tesla EV drivers, who have happily welcomed the news. While range anxiety was once a major concern, charging anxiety has now grown as a pain point for EV owners and a barrier to adoption for prospective customers. This refers to a lack of confidence not only around finding a charger, but it being available and fully functioning.

Studies and surveys, including those from J.D. Power and Plug In America, have found that over a fifth of non-Tesla public DC fast chargers are non-functional when drivers attempt use them to charge. This can be caused by issues such as the charge failing to initiate, error messages being displayed, or the screen simply being blank. The Supercharger network has not had the same widespread issues, leading to greater consumer satisfaction with both the charging network and their overall EV ownership experience.

As well as increased reliability, the Supercharger network is much larger than any other, responsible for around 60% of the 28,000 public DC fast chargers available at the end of 2022 in the United States. This network being fully accessible to drivers of cars from all OEMs should massively improve the experience of EV ownership and charging, and act as a catalyst of accelerated customer demand for EVs.

The real benefit for OEMs and their customers is access to Tesla’s Superchargers and Application Programming Interface (API), allowing them to integrate the network into their proprietary apps and infotainment systems. They are gaining this through agreements with Tesla, the details of which are not yet known. There is actually very little impact from OEMs just adopting a different plug. NACS and CCS Combo 1 both use the same CCS communications protocol, and they are highly compatible. All Teslas produced since 2019 can use a CCS charger with a simple adapter that currently costs US$175. The opposite is also possible, and Ford will be giving all of its existing EV customers a free adapter and including them with vehicles until the ports become NACS by default.

The failure of CPOs to provide an acceptable service for EV drivers is a driving factor for OEMs making the switch to NACS. Unlike Volkswagen, which was required by the U.S. government to spend US$2 billion building charging infrastructure through Electrify America as penance for Dieselgate, most OEMs are not heavily invested in North American charging networks. They are more concerned with making sure their customers are satisfied, which is best achieved through partnerships with Tesla and the Supercharger network.

This is an interesting move for Tesla. The switch to NACS comes too late for it to stamp out CCS on the charger side. The National Electric Vehicle Infrastructure (NEVI) program passed in 2021 makes US$5 billion in federal funds available to support the growth of high-speed charging networks, with the inclusion of a CCS connector a requirement for eligibility. To gain access to those funds to expand its network, Tesla committed to making 7,500 charging stations open to all EVs by the end of 2024 by including CCS adapters.

There is also a risk of upsetting existing customers and losing future sales. The Supercharger network is a differentiating feature that has helped Tesla sell vehicles, a unique asset that will now be subsumed as another competing charger network. These agreements giving other automakers access to the network indicate a change in tactic as the OEM enters a new phase in its development. Tesla’s EV market share will never be higher than it is today. It delivered 70% of U.S. BEVs in 2021, 64% in 2022, and 60% in 1Q 2023. It is still, by far, the dominant force in the American EV industry, but its lead is realistically untenable and expected to shrink further when other OEMs have reorganized and are mass producing a wide range of EVs on dedicated platforms after 2025. Opening its charging network means that Tesla will benefit from its competitors selling more EVs.

The OEMs that will be most negatively impacted by these changes are some of those that have already adopted 800 Volt (v) architectures. Hyundai and Kia cars using the Electric Global Modular Platform (E-GMP) are the most prevalent of these vehicles, but others, including the Lucid Air and Audi e-tron GT, are also affected. CCS chargers typically output up to 1,000 v, which these cars take advantage of to charge at high power with lower currents, meaning less heat is generated. Tesla’s vehicles have a 400 v architecture; however, the current generation of Superchargers can only supply up to 500 v.

This means that these 800 v vehicles must use a DC-to-DC converter to increase the voltage, but these devices are not rated for the same power level as the vehicles can normally take. The Lucid Air’s converter is limited to 50 Kilowatts (kW), the same is the standard for the Porsche Taycan with the option for a US$460 upgrade to a 150 kW converter. This is far from the maximum; they are capable of 300 kW and 270 kW, respectively, at high-power CCS stations. Hyundai-Kia’s E-GMP cars have 105 kW converters, but have also had widespread issues using Superchargers and drivers are waiting for a software fix to address this.

Hyundai could adopt a split pack architecture with two 400 v batteries similar to the GM Hummer EV or Volkswagen’s upcoming Premium Platform Electric (PPE), but this would require an extensive redesign of their platforms. A more realistic strategy for them is offering a larger DC-to-DC converter as an option or as standard in their North American vehicles as a stop gap until the charger market is predominately capable of supplying higher voltages.

Tesla’s next generation of V4 Superchargers will be capable of supplying up to 1,000 v, which would support the 800 v architecture that the upcoming Cybertruck is rumored to have, but these have not yet rolled out and will be a minority of the Supercharger network at least until 2025. In the short term, 800 v cars limited by their converters will be at a competitive disadvantage. For the E-GMP vehicles, their 230 kW fast charging is a big selling point, but if Hyundai partners with Tesla to gain access to the Supercharger network, its cars will be limited to 105 kW at the majority of American chargers, slower than the 110 kW that Ford’s 400 v Mach-E is capable of.

Opening its charging network will enable Tesla to diversify away from vehicle sales and build alternative streams of income. Currently, 86% of its revenue comes from its automotive business, 7% from energy generation and storage, and 8% from services and other sources, which includes Supercharging revenue. This revenue can be expected to grow significantly in the coming years, as the network expands and more drivers gain access, increasing usage rates. Tesla can also supply energy for its chargers through its solar business and Megapack grid-scale battery energy storage systems. This would see Tesla moving further into the territory that the oil & gas supermajors hope to occupy in the energy transition.

Though the specific terms of the agreements that give non-Tesla customers access to the Supercharger network are not known, the lack of protest from OEMs suggests that they are reasonable. Between the automakers that have already announced their switch to NACS and those that are in talks, such as Volkswagen, Supercharger access will transition from a differentiating feature for Tesla to a basic feature for many OEMs that customers will expect. OEMs should follow the crowd and sign their own agreements with Tesla or risk losing out on vehicle sales as customers will choose from the ample range of vehicles with access to North America’s largest fast charging network.