Tesla Logged Another EV Charging Win in Texas. The Stock Didn’t Go Up.

Texas officials are doling out money from the federal government’s $5 billion plan to improve EV-charging infrastructure in the U.S. Texas is set to receive more than $400 million of that money over the coming years.

It’s a win for Tesla, but an unsurprising one. Tesla has essentially won the battle over the shape of the North American EV charging plug—and the EV technology behind it. Many automakers including
Ford Motor
(F) and
General Motors
(GM) have announced they will adopt the Tesla plug.

The switch can’t happen overnight. With an industry transition underway to Tesla’s NACS plug, investors can expect to hear more decisions like the Texas one, mandating two plugs. Some charging stations will have two types of connectors for a while. It’s a little like VCRs that had a VHS and DVD slot while that technology transition was underway.

Dual plugs may add cost, but the decision seems sensible. Tesla accounts for about two-thirds of all EVs in Texas, and more than that if plug-in hybrids are excluded from the tally.

If a state doesn’t mandate Tesla’s technology, charging stations aren’t destined for obsolescence as NACS plugs proliferate. EVs with old plugs can just use an adapter. It’s a little like traveling to Europe with North American electronics.

Tesla stock closed down 2.8% at $219.22. The
S&P 500
and
Nasdaq Composite
fell 0.8% and 1.2%, respectively.

Coming into Thursday trading, Tesla stock had fallen for four consecutive days, and 11 of the past 12. Shares are down about 16% over that span. Shares have now dropped about 11% over the past five days and 18% over the past 13.

A couple of things are most responsible, and the unlikely cage match between Tesla CEO
Elon Musk
and
Meta Platforms
(META) CEO
Mark Zuckerberg
isn’t one of them.

For starters, the entire market is down in August. The Nasdaq Composite is off about 7% month to date. An EV price war in China is weighing on investor sentiment too. So far this month, Citi analyst Jeff Chung counts 23 price cuts on Chinese EV models from nine automakers, other than Tesla, which cut prices of its Model Y and offered new incentives on its Model 3 in response.

Tesla cut prices aggressively around the globe early in 2023. It helped Tesla deliver a record number of vehicles in the first half of 2023, but also pressured profits. Tesla reported a first-half operating-profit margin of about 10.5%, down from 17% in the first half of 2022.

Aside from wins on charging standards, Tesla investors will be looking for Cybertruck deliveries and news about a refreshed Model 3 to move the stock higher in the coming weeks. The market turning around would help too.

Write to Al Root at [email protected]