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Tesla faces a $7.5 billion ultimatum: Open up its charging network to rivals or be locked out of Biden's EV subsidies, report says

A diptych of President Joe Biden and Elon Musk
President Joe Biden and Elon MuskSamuel Corum/Getty Images, Taylor Hill/Getty Images
  • New US requirements will put Tesla under pressure to open up its EV charging network to rivals, per Reuters.

  • If it doesn't, it could miss out on getting in on the $7.5 billion in charger subsidies planned by Biden.

  • Tesla's 40,000+ EV chargers can only be used by its cars, but officials told Reuters that could change.

Tesla could find itself locked out of $7.5 billion in Biden administration subsidies if it fails to open its EV charging network up to competitors, according to a Reuters report.

The automaker's SuperCharger network has more stations in the US than any other charging company, but they can connect only to plugs used by Tesla cars.

But next week, the Department of Transportation will finish drafting a requirement that will put pressure on Tesla to add the charger used by rival electric-vehicle makers, Reuters reported Friday, citing administration officials.

If it doesn't, that could blow its chances of benefiting from the $7.5 billion in funding the Biden administration plans to lay out to increase the number of charging stations in the US.

"We do understand that Tesla is looking to tweak their system to be more open access. So, if they do reach that point and meet those eligibility requirements, they certainly will be eligible for funding," Stuart Anderson, head of Iowa's transportation development division, told Reuters.

Tesla has already had a boost from the Biden administration's EV push in February, when the DOT tweaked its $7,500 tax credit consumer incentive plan to include more eligible models by expanding the definition of an SUV. That increased the potential demand for some of Tesla's models.

Tesla CEO Elon Musk met with two White House officials last month to discuss ramping up EV production and the Bipartisan Infrastructure Law, which includes the legislation on charging equipment.

Musk has spoken in the past about opening up the Supercharger network, but hasn't moved publicly to let others in. Tesla is dominant in chargers in the US, and it has a huge private network of more than 40,000 EV chargers globally.

Opening up that network to competitors like Ford, GM, and Rivian could take some of the shine off Tesla's brand, by removing its customers' exclusive use. On the other hand, it could eventually be a new revenue stream for Tesla in addition to any subsidy windfall.

Shares in Tesla were up 1.1% in premarket trading Monday, after closing 5% lower Friday in a broader-based stock slide. The EV maker's stock has risen about 60% in the year to date.

The DOT declined to comment.

Tesla didn't immediately respond to Insider's request for comment.

Read the original article on Business Insider