Texas Secures Subsidies for Tesla’s EV Charging Tech


Texas has joined the fray in the ongoing battle over electric-vehicle (EV) charging standards, delivering a victory for Tesla. This development could potentially help the company regain momentum in the stock market.

According to a report by Reuters on Wednesday, the Texas Transportation Department has announced that Tesla’s charging technology will be required to qualify for state subsidies. However, the department has not yet responded to requests for comment on this matter.

As part of the Federal Government’s $5 billion plan to enhance EV-charging infrastructure in the United States, Texas is slated to receive more than $400 million in funding over the next few years.

The triumph for Tesla comes as no surprise given its dominant position in the standards battle for the North American EV charging plug and associated technology. Major automakers, such as Ford Motor and General Motors, have already committed to adopting the Tesla plug.

While the transition to the Tesla NACS plug will not happen overnight, investors should anticipate more decisions like the one made in Texas, which mandates the coexistence of two plugs at charging stations. This dual-plug setup is akin to VCRs that once featured slots for both VHS and DVD, facilitating a smooth transition between technologies.

Although implementing dual plugs may incur additional cost, it is a logical decision considering that Tesla currently accounts for around two-thirds of all EVs in Texas, excluding plug-in hybrids.

Even without state-mandated adoption of Tesla’s technology, charging stations will not become obsolete as NACS plugs become more widespread. EVs equipped with older plugs can simply use an adapter, similar to how North American electronics can be used in Europe with an adaptor.

Texas’ move to support Tesla’s charging technology not only secures subsidies for the company but also highlights its dominance in the EV market. With the expected increase in funding for EV-charging infrastructure, Tesla seems poised to maintain its strong position in the industry.

Tesla Stock Facing Challenges Amidst Market Turbulence

Tesla stock, after a series of setbacks, is showing a slight upward trend in premarket trading. While a modest increase of 0.8% may not be significant, investors are eager for any positive momentum as the stock has experienced a decline over the past few days, dropping by about 16% overall.

Contrary to popular belief, the ongoing feud between Tesla CEO Elon Musk and Meta Platforms CEO Mark Zuckerberg is not the primary cause of these challenges. Rather, the entire market has been struggling throughout August, with indices like the S&P 500 and Nasdaq Composite facing hurdles. Specifically, the Nasdaq Composite has dipped by approximately 6% so far this month. Furthermore, investor sentiment has been negatively affected by a price war in China. Various Chinese automakers, excluding Tesla, have engaged in 23 price cuts on their electric vehicle models. Tesla responded by lowering prices for its Model Y and introducing new incentives for its Model 3.

Although these price cuts allowed Tesla to achieve record-breaking vehicle deliveries in the first half of 2023, they also put pressure on the company’s profits. In fact, Tesla’s operating-profit margin for this period was around 10.5%, a significant decrease from the 17% margin observed in the first half of 2022.

Moving forward, Tesla investors are eagerly anticipating Cybertruck deliveries and updates on the refreshed Model 3, as these developments could potentially boost the company’s stock value. However, it is crucial to note that a broader market recovery would be advantageous as well.

In conclusion, while Tesla faces its fair share of challenges, it remains hopeful that various factors will contribute to its future success.

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