Tesla drives NC’s shift to EVs

Over the past five years, Tesla models have accounted for more than two-thirds of new electric-vehicle registrations in the state, according to figures provided at the Journal’s request by the N.C. Department of Transportation.

Chasing the enigmatic Elon Musk’s Austin, Texas-based company, barely visible on the EV horizon, are Nissan (6.3%) and Chevrolet (6%).

Stalwarts like Toyota and Honda — whose influence led to a transformation in the U.S. automotive industry toward fuel-efficient vehicles in the 1970s — are absent from NCDOT’s list because neither hit 30 EV registrations in the state in 2023, spokesperson Jamie Kritzer said.

Tesla’s jumpstart is no surprise to experts who follow the electric-vehicle industry.

“The reason for Tesla’s dominance is pretty simple,” said Stephen Holland, a UNC Greensboro economics professor who has studied the impact of EVs. “They were the first ones to have good electric cars.”

When Tesla was founded in 2003, skepticism lingered over the future of on-the-road transportation not powered by fossil fuels.

“Then Elon Musk came along and made electric vehicles cool,” Holland explained.

Tesla’s Roadster sports car debuted in 2008, followed by the Model S sedan, which was introduced in 2012, and the Model X SUV, which launched in 2015.

By the time he took charge of Tesla, Musk had already launched aerospace company SpaceX, which sent its latest rocket on the way to the International Space Station recently. The same shoot-for-the-stars inspiration drove Musk’s Tesla strategy.

“I wouldn’t have taken his approach,” Stephens said. “I would have said, ‘Oh, let’s have this environmentally friendly car that’s electric.’”

But for Musk, a billionaire many times over with a penchant for expensive toys, affordability was not a priority at Tesla.

“He went totally on performance and built an amazing car,” Stephens said. “Basically, he’s been riding that momentum since then.”

While other manufacturers have experienced annual EV gains by the hundreds — or in some cases, dozens — nearly 30,000 Teslas took to North Carolina roads over the past five years, according to NCDOT. The next closest were Nissan, driven largely by its LEAF model, with nearly 2,800 new registrations; and Chevrolet, dominated by the Bolt, at 2,600.

The LEAF and Bolt have one thing in common that Tesla does not. Both have starting sticker prices below $30,000, still a rarity for new EVs.

Base Tesla prices in the U.S., meanwhile, begin at a little more than $40,000 for the Model 3.

From the early days of Tesla, Musk maintained a dual focus on the company’s product and what would drive — or detour — potential customers looking to plug in.

“Tesla is laser-focused on delivering a superior electric driving experience,” said Stan Cross, electric transportation policy director at the Southern Alliance for Clean Energy. “That includes building a robust network of fast charging stations that provide Tesla drivers with convenient and reliable access to every corner of the state, something other EVs cannot currently offer.”

Musk realized that customers with “range anxiety” would hesitate to make the shift to EVs if they feared being stranded in a dead vehicle with no available charger.

So Tesla has deployed 18,000 of its Superchargers across all 50 states, which account for about 60% of total U.S. fast chargers that can add hundreds of miles of driving range in an hour or less. However, those Tesla facilities will only accommodate Tesla vehicles, giving the company a leg up on other manufactures.

There are also nearly 10,000 “destination” chargers with Tesla plugs that can recharge a vehicle overnight.

“The federal Bipartisan Infrastructure Law’s $7.5 billion in public charging station funding will help level the playing field, but Tesla will continue to dominate as long as the traditional automakers waffle between electric and gas vehicles and resist taking any responsibility for their customers’ charging needs,” Cross added.

Tesla announced in February that it would open 3,500 new and existing Superchargers along highway corridors nationally to non-Tesla customers by 2024, as well as 4,000 slower chargers at locations like hotels and restaurants. However, the bulk of the company’s network will remain exclusive to Tesla owners.

Tesla’s jump on the industry and superior range early on gave Musk a near-monopoly.

“I don’t envision him maintaining this dominance at all,” said Stephens, the UNC Greensboro professor. “They’re not developing new models. Now he’s wasting his time on Twitter (which he bought in October for $44 million) and making a lot of enemies there. I think he’s hurting his brand.”

As improved batteries expand range for all EV brands, Tesla’s charging network will become less of an advantage, he noted.

“The big thing that’s really going to change (the industry) is the Chinese,” Stephens added. “Chinese manufacturers are really building a lot of EVs now, and are moving into it faster than anyone else.”

Traditional U.S. automakers also are transitioning to plug-in vehicles, expanding choices and price points.

“Once Toyota and Honda get into this game (aggressively), there’s no way Tesla’s going to keep this advantage,” Stephens said.

Heat-trapping pollution from transportation is the leading contributor to climate change in North Carolina. That makes electric vehicles a key component in reducing the state’s greenhouse gas emissions.

With more than 61,000 registered EVs in North Carolina as of March 31 — a 14% jump for the first quarter of 2023 — the state is on pace to meet Gov. Roy Cooper’s goal of reaching at least 80,000 “zero-emission” registrations by 2025.

However, the state faces a steep climb to reach Cooper’s longer-term target of having 1.25 million EVs on the road by the end of this decade.

“As the scale starts to tip towards EV sales, it’ll be important that we’re exploring all options to help consumers more readily get their hands on these vehicles, including direct-to-consumer sales, a model preferred by some EV manufacturers in the space,” said Matt Abele, director of marketing and communications at the N.C. Sustainable Energy Association

Tesla is already at the top of that list.

The company operates sales centers in Mecklenburg and Wake counties, and plans to open two more: a Triad location in High Point and another in Asheville.

Tesla is the only manufacturer not required to go through a dealership to sell its vehicles in North Carolina, thanks to legislation passed in 2019 by the N.C. General Assembly.

Other EV-only manufacturers including VinFast, a Vietnamese company planning a factory in Chatham County, and Charlotte-based Arrival have no such waiver from the state’s sales law, which is backed by the powerful North Carolina Automobile Dealers Association.

Another electric-vehicle maker, Rivian, cited the state’s dealership requirements last year when it picked Georgia over North Carolina for a $5 billion manufacturing facility.

However, even if they view North Carolina’s EV playing field as tilting toward Tesla, competitors are benefitting from Musk’s vision for Tesla, Abele noted.

“The success of their growth has helped to lead other manufacturers down the path of electrifying their offerings, with many new EV models set to hit the road over the coming months and years,” he said.