Texas subsidizes chargers at gas stations, not Tesla CCS, but we learn Tesla chargers cost 1/4 those of others

[RTPEV]

Station reliability: Get promises of station uptime. Many subsidized stations end up broken with nobody in a rush to repair, as the subsidy paid for them but not for operating them. Larger stations with many stalls are more reliable because having one station broken is not a big deal.

This would be great, but I don't know how you can work this into a grant application/award. You can certainly award based on reputation of the applicant with past projects, but I'm going to guess that if you want to try to build in some kind of service level agreement into the T&C's, that it's not going to pass muster with the applicant's legal team. One possible issue is how many years would the SLA apply for? 5? 10? 99?

Ease of use: Insist on Plug-to-charge or a very simple way to pay with a credit card. This is to be preferred over specialized apps.

Apps aren't always bad, and sometimes the opposite is true. My wife got free charging at Electrify America (I think it's 3 years) when she bought her car, but to get that she needs to use the app to initiate the charge (her car doesn't support plug-to-charge). Also accounts/apps would be beneficial for frequent users that might want to be on a high-usage plan where they can get access to discounted rates in return for a monthly fixed fee.

That said, in the context of awarding grants, I think it's probably sufficient to state that there needs to be a way to use (pay for) the station reliably without the need for an account or a vehicle capable of plug-to-charge working through a widely accepted intermediary account (Aeon Charge? or Tesla for Tesla vehicles). Perhaps this implies a reliable credit-card capability. But I would award bonus points for applicants that can provide plug-to-charge capability and other easy-to-use payment methods in addition to the default method.

 

[bradtem]

This would be great, but I don't know how you can work this into a grant application/award. You can certainly award based on reputation of the applicant with past projects, but I'm going to guess that if you want to try to build in some kind of service level agreement into the T&C's, that it's not going to pass muster with the applicant's legal team. One possible issue is how many years would the SLA apply for? 5? 10? 99?


Apps aren't always bad, and sometimes the opposite is true. My wife got free charging at Electrify America (I think it's 3 years) when she bought her car, but to get that she needs to use the app to initiate the charge (her car doesn't support plug-to-charge). Also accounts/apps would be beneficial for frequent users that might want to be on a high-usage plan where they can get access to discounted rates in return for a monthly fixed fee.

That said, in the context of awarding grants, I think it's probably sufficient to state that there needs to be a way to use (pay for) the station reliably without the need for an account or a vehicle capable of plug-to-charge working through a widely accepted intermediary account (Aeon Charge? or Tesla for Tesla vehicles). Perhaps this implies a reliable credit-card capability. But I would award bonus points for applicants that can provide plug-to-charge capability and other easy-to-use payment methods in addition to the default method.

Lots of companies manage SLAs. They have to refund some of the subsidy if they don't maintain the reliability. Yes, if they go bankrupt you lose it. If the applicant is scared of the SLAs, they can just not apply for a grant! Taxpayer money should not go into stations that are always broken.

Or you can look at past reputation but that limits to existing big players. But a lot of subsidized charging was installed at taxpayer expense and it ends up mostly unmaintained and you don't want to repeat that.

There is a paradox on ease of access. Tesla stations are simple, they have no UI. To use them without an app would increase their cost by adding a card reader and screen. In time, though, most new cars will have plug-to-charge and once that happens, I am OK with saying you can use an app if the car doesn't have plug-to-charge, as that lets stations be simpler and easier. Another alternative, though not easy, is to have a phone number on it that you can call to initiate charging. Or perhaps, instead of an app, just a web site URL and QR code where you can initiate charging using apple pay or google pay, which would be a fairly easy to use interface for those who don't have plug to charge (or Tesla's equivalent.)

 

[bradtem]

I wrote a follow-on article, in response to reader comments about whether Buc-ee's, being a very good gas station, would also be a good place to charge.
Today, it's probably not too bad but our standards are lower than they should be.

Buc-ee’s May Be The Ultimate Gas Station. That Doesn’t Mean It’s Best For EV Charging

Gas stations are places you go for gas which have amenities. EV charging should be an amenity at places you are already going for something else.

www.forbes.com

 

[e of pi]

@bradtem, I wanted to pick on a detail about this a bit more: you mention that Tesla requested $500k for a 17-stall station, while others were asking $600k for 4-stall stations, and that the max allowable to request at all per site was $600k. Doesn't that'd suggest that the maximum subsidy Tesla could have asked per stall at a 17-stall station, regardless of their cost to build it, was $35k/stall? I think that makes it really hard to claim that $30k is provably 70% of their costs instead of just somebody at Tesla who looked at a balance sheet and figured it was better to get $500k back on a station they plan to build anyway than asking for the maximum permissible account and maybe getting nothing, hoping bidding would take cost into account in a way it turned out it didn't.

 

[bradtem]

@bradtem, I wanted to pick on a detail about this a bit more: you mention that Tesla requested $500k for a 17-stall station, while others were asking $600k for 4-stall stations, and that the max allowable to request at all per site was $600k. Doesn't that'd suggest that the maximum subsidy Tesla could have asked per stall at a 17-stall station, regardless of their cost to build it, was $35k/stall? I think that makes it really hard to claim that $30k is provably 70% of their costs instead of just somebody at Tesla who looked at a balance sheet and figured it was better to get $500k back on a station they plan to build anyway than asking for the maximum permissible account and maybe getting nothing, hoping bidding would take cost into account in a way it turned out it didn't.

And they asked for $384K for a 9-stall station.

Of course, absent seeing the bills, one can't prove they didn't under-pad the grant requests. "Let's just deliberately request less than the grant would give us, even though there is no downside to asking for the max," said nobody ever. When I got my $7,500 tax credit on my Tesla, I didn't consider for a second only asking for $3,000, nor did anybody else.

I don't understand the idea that one needs to prove that Tesla didn't deliberately ask for less. I would want to see evidence that they did.

The rules said it would be order of bid received. Tesla knows the cost of their own stations and others. They would know that $500K for 17 is ridiculously less than anybody else, and so is $600K. If they were trying to look cheaper, there is no reason not to request $600K.

One thing that is slightly possible is that Tesla was actually planning to just expand existing superchargers. If they had an existing supercharger and wanted to add 17 more Tesla+CCS stations to the N Tesla-only stations there, that would cost less than building a new station, particularly if they already had put in more electrical service the first time. Maybe we will learn that. But so far that's the only reason I've come up with to explain the low quotes. The idea of quoting $500K (or $384K) when you could get $600K at no detriment whatsoever makes no sense at all, you need to show what this reason to throw away the money is.

 

[e of pi]

And they asked for $384K for a 9-stall station.

Well, that's stronger evidence...but there it implies a minimum cost to Tesla per stall of $60k (384/9/0.7 = $60.9k/stall), almost twice the value of $30k/stall your story initially was running with. I lack access independently to the data here, so I can only go off what you relay. Being able to install stations for $61k/stall instead of $150k/stall given the larger station size spreading the cost of things like transformers and concrete pours over a larger total number of plugs, and it's a lot stronger evidence. I think that $384k 9-stall station is stronger evidence of a true cost to install than a 17-stall station for nearly the maximum allowed value of the contract. More details on where and how these stalls were proposed to be installed (new stations or expansions of existing ones) would help further what that implied $60k/stall really means.

Of course, absent seeing the bills, one can't prove they didn't under-pad the grant requests. "Let's just deliberately request less than the grant would give us, even though there is no downside to asking for the max," said nobody ever...One thing that is slightly possible is that Tesla was actually planning to just expand existing superchargers. If they had an existing supercharger and wanted to add 17 more Tesla+CCS stations to the N Tesla-only stations there, that would cost less than building a new station, particularly if they already had put in more electrical service the first time. Maybe we will learn that. But so far that's the only reason I've come up with to explain the low quotes. The idea of quoting $500K (or $384K) when you could get $600K at no detriment whatsoever makes no sense at all, you need to show what this reason to throw away the money is.

That's certainly another possibility for the low bids. However, it's not unheard of in business to low-bid a contract to help ensure you get it, and hope to make up the difference later either through leveraging add-ons to the base contract value or through having the relationship established making it easier to win future contracts, possibly at a higher fraction of true cost. Lockheed, Boeing, and numerous building contracts are well known for it. And if Tesla is figuring they're going to be putting those stalls in the ground anyway, then anything they got for it was a positive. It's like how if I ask you to drive me to the airport and you weren't going to do it otherwise you might ask me to spot you $20 to cover the time and gas/charge, but if you needed to go to the airport anyway, any amount you get is a benefit and maybe you let me ride along for for $10: it's still $10 more than you'd have gotten if you drove there solo.

 

[bradtem]

Well, that's stronger evidence...but there it implies a minimum cost to Tesla per stall of $60k (384/9/0.7 = $60.9k/stall), almost twice the value of $30k/stall your story initially was running with. I lack access independently to the data here, so I can only go off what you relay. Being able to install stations for $61k/stall instead of $150k/stall given the larger station size spreading the cost of things like transformers and concrete pours over a larger total number of plugs, and it's a lot stronger evidence. I think that $384k 9-stall station is stronger evidence of a true cost to install than a 17-stall station for nearly the maximum allowed value of the contract. More details on where and how these stalls were proposed to be installed (new stations or expansions of existing ones) would help further what that implied $60k/stall really means.

That's certainly another possibility for the low bids. However, it's not unheard of in business to low-bid a contract to help ensure you get it, and hope to make up the difference later either through leveraging add-ons to the base contract value or through having the relationship established making it easier to win future contracts, possibly at a higher fraction of true cost. Lockheed, Boeing, and numerous building contracts are well known for it. And if Tesla is figuring they're going to be putting those stalls in the ground anyway, then anything they got for it was a positive. It's like how if I ask you to drive me to the airport and you weren't going to do it otherwise you might ask me to spot you $20 to cover the time and gas/charge, but if you needed to go to the airport anyway, any amount you get is a benefit and maybe you let me ride along for for $10: it's still $10 more than you'd have gotten if you drove there solo.

I think it's evidence in the other direction. The fact that the quote for the 17-plex was more than the 9-plex indicates the cost of the station was a big factor in the amount quoted. Everybody knows the cost is not "per stall." Most of the cost is in things outside the stall, and that's true for almost all stations. It's 3/4 of the cost that's outside the stall in California, on average. The fact that grants are allocated per-stall had bent what people quote and made it higher -- not lower!

Again, the rules said that grants would be awarded first come first served as long as the station met the other requirements for location, hours etc. There was no reason to believe a lower quote would increase the probability of getting the award -- well, other than the fact that this would have been a good way for Texas to do it. But they did not.

If Tesla's real costs were higher, I still can't find any reason to not request the $600K for both stations. Other applicants asked for $600K for both 4-plexes and 6-plexes.

 

[TunaBug]

Well, they do have to show actual costs.

That seems naïve. They have to show costs but how much digging will anybody do to verify what "actual" is? Contractors have been selling $10,000 hammers to the government for a very long time. Get the highest bid from subcontractors, get a grant based on that, then find a lower cost provider who is willing to charge the original amount and split the difference with you.

Maybe once these things are built out you can go Woodward and Bernstein and figure out what the real actual costs were?

Overall, though, I appreciate that your articles are trying to dig into things. I read your article with interest before seeing this thread, much less realizing that you are the author.

 

[bradtem]

That seems naïve. They have to show costs but how much digging will anybody do to verify what "actual" is? Contractors have been selling $10,000 hammers to the government for a very long time. Get the highest bid from subcontractors, get a grant based on that, then find a lower cost provider who is willing to charge the original amount and split the difference with you.

Maybe once these things are built out you can go Woodward and Bernstein and figure out what the real actual costs were?

Overall, though, I appreciate that your articles are trying to dig into things. I read your article with interest before seeing this thread, much less realizing that you are the author.

Yes, I am sure there will be some padding, though it seems not from Tesla. And based on past figured released, it is not hard to spend $100K per stall on a small station, with 75% of that being on bringing in service, wiring, digging and the master power units which are in that big box to the side of the station, not in the thing you think of as the charger.

Of course we look forward to the day that this becomes done in quantity and cheaply, since the world needs millions of these stations.

 

[Nosken]

Could it be Tesla was simply asking for a grant for the additional price of incorporating public charging infrastructure, and not seeking grants for the Tesla charger?

 

[bradtem]

Could it be Tesla was simply asking for a grant for the additional price of incorporating public charging infrastructure, and not seeking grants for the Tesla charger?

I considered that, though in that case I think the value is high. Tesla already supports CCS in their charging system so it's really just adding some cables in that case. Also I suspect Tesla doesn't want to remove capacity from its charger network for Tesla users, it is spending like crazy trying to expand it.

Now it could be a mix -- convert some stations two both connectors, and some new stations.