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Tesla Leads Race to Draw Federal Money for Charging Networks

Elon Musk’s company is beating out rivals to win millions of dollars in federal grant awards

Tesla TSLA -5.06%decrease; red down pointing triangle is winning the early stages of the EV charging race.

The electric-vehicle maker is building charging stations cheaper and faster than competitors. As a result, Tesla is scooping up millions of dollars in federal grant awards for building roadside chargers with bids that are about half the cost of what its rivals have offered.

The federal funds, part of a national effort to build out the country’s charging network, might help solidify Tesla as a dominant force in the charging market. No one expects a monopoly, and a group of other automakers plans to invest $1 billion in chargers, but the company already operates the nation’s largest charging network, with a decade head start on many newcomers.

A handful of states are starting to release the first wave of about $5 billion intended to dot U.S. highways with fast chargers and overcome “range anxiety.” The money was approved in the 2021 federal infrastructure law and is being released over five years. Many states have committed billions of dollars more.

The ability to repower cars in about 30 minutes and let drivers hopscotch from charger to charger across the country is considered essential to putting EV drivers at ease. Automakers are investing heavily in EVs, but so far the U.S. has only around 33,400 fast chargers, according to government data.

Three out of five of all fast chargers are in Tesla’s network. The company started building its proprietary Supercharger network a decade ago so its drivers could take road trips. In February, Tesla said it would open part of the network to other vehicles.

The company is installing large banks of chargers at a faster clip than others—and has said it can do so at a cost 20% to 70% lower than rivals. It plans to fit its chargers with connectors that work with Teslas or other kinds of cars, qualifying it for federal money.

So far, Tesla is the winning bidder to build chargers at about 18% of the sites selected by states using the federal dollars to fund fast chargers, more than any other company, according to data from EVAdoption, an EV and charging analytics firm. Tesla has won around $8.5 million of the roughly $77 million awarded so far.

Five states—Ohio, Hawaii, Pennsylvania, Maine and Colorado—have selected winners at this point, and full details on sites and designs aren’t yet available. Tesla’s bids averaged around $392,000 a site compared with an average of $795,000 from others.

In most cases, Tesla plans to install eight chargers, and in some cases a dozen. Most companies are sticking to the minimum required by the federal government—at least four fast-charging ports at a station.

Tesla didn’t respond to a request for comment. The company’s chargers are more of a marketing tool to sell cars than a moneymaker. Supercharger revenue could reach about $885 million next year and $10 billion in a decade, according to analysts at Piper Sandler. By then Tesla’s total revenue could reach more than $700 billion, they said.

Other winners so far include some of the nation’s largest convenience stores and truck stops, which have spent decades buying property at highway exits. They have largely avoided major charging investments while the nascent industry remains unprofitable, but are applying for funding to help launch themselves into selling electricity as fuel. Many plan to join with EV-charging networks including Tesla’s to build and operate equipment on their properties.

“They’ve got the real estate,” David Jankowsky, founder and chief executive officer of the Oklahoma-based charging company Francis Energy, said of truck-stop companies. Francis Energy’s federal grant awards include a project at a convenience store along Interstate 70 in Colorado.

The names will be familiar to drivers. Sheetz, Wawa, Love’s Travel Stops, Pilot Flying J, Kum & Go and TravelCenters of America are among the businesses selected by the states to receive federal charging dollars. In all, around 73% of the locations chosen were convenience stores or truck stops, according to EVAdoption.

Brad Jenkins, president of Pilot’s PFJ Energy, said a “significant number of our gas customers” will ultimately switch to EVs, and that grants help to defray but don’t cover building chargers. Pilot’s grant awards included $9.6 million in funding for 14 sites in Ohio.

“The grants go a long way to enable first movers not to face that investment penalty,” Jenkins said.

Shailen Bhatt, administrator of the Federal Highway Administration, said the grants should help spur private investment to “make charging your electric vehicle as convenient as filling up a gas tank.”

Ubiquitous charging stations are still years away. Charging sites have engineering, permitting and construction work to do, plus supply-chain challenges. Utility connections can take a year or longer in some locations.

The charging industry outside the Tesla network has struggled with growing pains, including broken equipment, billing fights with utilities and unprofitability because of the relatively low—for now—percentage of EVs on the road.

President Biden aims to have 500,000 public chargers in the ground by 2030, up from almost 145,000 now. They would be a mix of slower chargers that take several hours to repower EVs and fast chargers, the harder and more costly piece of the charging puzzle. The huge power draw of fast chargers means they often require electrical upgrades.

Tesla’s price advantage is in part because it makes its own chargers. In one Maine bid, it estimated hardware costs of $17,000 a charger, compared with $130,000 by another company, according to EVAdoption.

“We’re vertically integrated,” said Rebecca Tinucci, Tesla’s head of global charging infrastructure, at an investor meeting in March. “We manufacture and engineer all of our own charging equipment.”

The company has established relationships with utilities and local government offices that must approve paperwork, and in some spots has started installing fully assembled charging stations that it transports by truck and plunks down like Legos, cutting construction time. “They move at the speed of light,” Loren McDonald, CEO of EVAdoption, said about Tesla.

In recent months, companies including Ford Motor, General Motors and Rivian Automotive have said they would switch to the Tesla-developed North American Charging Standard on their EVs starting in 2025 and gain access to Tesla chargers next year. For the next several years, the U.S. will have a two-connector system, with most charging stations moving to offer both Tesla’s and the one currently used by most of its competitors.

Relocation of Ken Griffin’s hedge fund from Chicago is driving demand in salubrious suburbs

The migration of New York financiers to Miami has created a shortage of luxury housing in upmarket suburbs, where buyers have purchased multimillion-dollar homes in search of easy commutes, more space and proximity to prestigious schools.

Real estate agents say one firm stands out for driving demand: Citadel.

Citadel, the $59bn hedge fund and market maker run by Ken Griffin, in June 2022 announced it would move its headquarters from Chicago, citing lower crime in Florida and the sunshine state’s lower taxes.

“They’ve been buying here aggressively,” said Michael Martinez, a real estate agent with Sotheby’s in Miami, who recently brokered the sale of a $5mn home in Coconut Grove, a quiet salubrious suburb, to a Citadel employee. Most of the luxury homes he has sold in recent months have been to hedge fund buyers, half of them from Griffin’s firm, he estimates. “The Citadel migration is definitely occurring.”

Buyers from Citadel were particularly active in the early spring, agents said, as employees raced to secure properties in time for school enrolment deadlines.

“Employees have been enthusiastic about the headquarters’ move to Miami and appreciate the vibrant energy and quality of life the city has to offer,” said Citadel.

Citadel has moved almost 300 employees to Miami during what the hedge fund describes as a multiyear effort to shift its operations out of Chicago. One employee said the relocation benefits on offer were “generous”, helping to cover the higher cost of living in a city that has boomed since the pandemic.

“The hottest price point in the Gables is between $4mn and $7mn for a five or six thousand square foot house,” said Erin Sykes, a real estate agent in Miami and economist for Nest Seekers, referring to upscale suburb Coral Gables. “That’s what all of these families are looking for.”

“These neighbourhoods are tropical, they’re lush, kind of like the way Florida is imagined to be,” she said. “In the Grove there’s literally peacocks that walk across the street. You have to be really careful driving.”

But a shortage of supply has created a paucity in the high-end home market, as construction backlogs and labour shortages slow development.

In July, Florida governor Ron DeSantis, who is running to be the Republican party’s presidential nominee, signed a law targeting illegal immigration that imposes steep fines on employers who do not check workers’ documentation.

The move has resulted in a shortage of construction workers and is expected to slow development of new homes. “A project that would take six months will now take 12,” said Brett Harris, executive director of luxury sales at real estate firm Douglas Elliman.

There is much more of an inventory shortage in those desirable suburbs. Supply is down by half compared to a year ago,” said Sykes.

The number of luxury homes between $3mn-$7mn in Coral Gables and Coconut Grove has fallen by more than 50 per cent since the start of the pandemic, according to Zillow data. Homes in this price range now account for 40 per cent of total listings.

Sykes said the Citadel effect in Miami was akin to the impact that Google had on Venice Beach in Los Angeles when it opened a large office there. “Every seller was targeting these new Google employees. That’s the only time I’ve seen a single employer-driven market like this.”

Citadel bosses moving to the Miami suburbs have been willing to spend more for “turn key” homes that are ready to move into and require no renovations because they want to settle in before the school year started in mid-August, agents said.

“It’s definitely created a shortage of good properties,” said Jennifer Goldstein, a luxury real estate agent with Official. Buyers like the idea of waterfront living after years of surviving Chicago winters, she added. “We’ve had a lot of Citadel and hedge fund clients that are looking for a resort type house that’s the opposite of what they’ve had . . . They want to play tennis, go fishing and entertain.”

Of the 20 properties Goldstein sold in the past 12 months, she said 70 per cent of buyers worked at hedge funds, many of them Citadel. “And they’re all cash buyers.”

While agents said the pandemic-era bidding wars have largely abated as prices have plateaued, demand for luxury homes persists. “Even in the higher luxury homes it’s not unusual to receive multiple offers on a $10mn plus home,” Martinez at Sotheby’s said.

Shortages were feeding through to homes that were not seen as ultra-luxurious, agents said as Citadel moves not just top earners but also back-office staff to Miami. “When you have an organisation like Citadel, not everyone is making $5mn, $10mn, or $50mn a year,” Sykes said. “They’re not searching for $5mn properties, they’re looking more at the $2mn properties.

“They want to go to the same schools, and eat at the same restaurants . . . they want the fairy tale as well.”

Investors expect further weakness ahead of next month’s election

Hedge funds have upped bets against Argentina’s bonds as the emergence of radical rightwing candidate Javier Milei has sparked investor fears that the country is on course to elect a leader who will struggle to govern in the throes of an economic crisis.

The total value of Argentina’s bonds borrowed by investors to wager on a fall in prices has jumped by 65 per cent since Milei, a self-described “anarcho-capitalist”, won a primary poll last month ahead of a presidential election in October.

His plans to radically cut public spending and dollarise the country’s ailing economy have shaken the country’s fixed income and currency markets. The value of short positions against Argentine bonds lent by international custodian banks is currently $41mn, a sharp increase from $25mn ahead the mid-August vote, according to data from S&P Global Market Intelligence.

While the numbers are small compared with the overall value of Argentina’s debt, the surge comes despite the fact the bonds already trade in deeply distressed territory.

Caution from international investors comes after a period of turmoil for Argentina’s teetering economy. Inflation is running above 113 per cent, foreign exchange reserves are at dangerously low levels and the peso has lost more than half of its value against the dollar over the past 12 months.

“Given the Argentine dire macroeconomic situation, there is no room for errors,” said Alejandro Arevalo, head of emerging markets debt at Jupiter Asset Management.

He added investors were worried about the difficulty Milei would have implementing much-needed reform policies without a majority in Congress or backing from Argentina’s powerful labour unions, as well as execution risks with Milei, an inexperienced and radical leader.

“The question is not so much whether the proposed reductions in public spending will trigger social protests, but rather how Milei will react to these protests,” Arevalo said.

Investors say the most market-friendly candidate is the more moderate rightwing Patricia Bullrich, who is also proposing a programme of fiscal consolidation. While Milei said he would dramatically cut government spending, his stance has raised concerns over the feasibility of his proposals.

“The dollarisation plan of the leading candidate, Javier Milei, is radical and problematic and it is unclear if it is even achievable or worthwhile,” said Paul Greer, emerging markets debt and FX portfolio manager at Fidelity International. “The market will have great difficulty dealing with this, if he attempts it.”

The primary election result has also extended a period of political paralysis. With the electorate split roughly three ways between Milei voters, the mainstream centre-right party and those of incumbent populist Peronists, October’s election is hanging by a thread and analysts say a run off in November is a near certainty.

Investors are worried about what could happen in Argentina between now and November, as the devaluation of the exchange rate puts even more pressure on the country’s spiralling inflation problem.

“A dire situation in the short term is probably going to get even more dire,” said Peter West, economic adviser at EM Funding. “I’m not predicting this will happen but there’s a chance Argentina could fall into hyper inflation — monthly inflation will probably be in double digits in the coming months.”

The price of Argentine dollar bonds fell as much as 15 per cent immediately after Milei won more than 30 per cent of the vote held on August 13, and the value of the peso on unofficial exchange rates weakened. The central bank responded quickly by devaluing its official exchange rate by as much as 18 per cent to 350 pesos per dollar, which helped bonds recover part of their losses.

The blue-chip swap rate, a free-floating exchange rate for international investors who buy stocks and bonds, has continued to weaken to more than 780 pesos to the dollar on Friday.

English Premier League pays out £2.36bn in fees this summer

An influx of cash from Saudi Arabia stoked a record-breaking summer transfer window for European football, with clubs in the English Premier League spending more than £2bn on new players for the first time.

At the close of the window on Friday night, top tier English clubs had paid out fees of £2.36bn, according to figures from consultancy Deloitte, up from the previous record of £1.92bn set last summer. The average fee paid per player by Premier League clubs rose to £24mn, up from £18.8mn last year, and £14mn in 2018.

Total fees generated from sales by Premier League clubs hit £550mn, more than double the previous record. A number of sizeable transfer deals took place between top English clubs this summer, including Chelsea’s signing of Moises Caicedo from Brighton and Arsenal’s purchase of Declan Rice from West Ham. Both midfielders moved for more than £100mn.

English clubs have long been the biggest spenders in football, largely thanks to the Premier League’s lucrative broadcast deals both at home and overseas. Many teams also have deep-pocketed owners, either from Gulf sovereign wealth, US private equity or billionaires.

But a sudden spending spree by Saudi Arabian football clubs proved to be a significant new driver of the market. In June, Riyadh handed control of four of its top domestic football clubs to the state-backed Public Investment Fund. Since then those clubs have paid out hundreds of millions of euros to lure top talent to the Saudi Pro League.

Although US-owned Chelsea FC was the biggest gross spending club in football for the second year running, Saudi team Al-Hilal came a close second and was comfortably the biggest net spender. The Riyadh-based side forked out €345mn in new players, according to Transfermarkt, including €90mn on Brazilian forward Neymar from Paris Saint-Germain and €55mn on Rúben Neves from Wolverhampton Wanderers.

According to Deloitte, Saudi Pro League clubs have spent a total of €805mn so far — the Saudi transfer window remains open for another week — making it the fourth-biggest spending league in football this summer.

Much of that money has landed in the Premier League, accounting for more than the fees received by English clubs from overseas transfers. Saudi clubs still have plenty of money to spend, with Jeddah-based Al-Ittihad reportedly offering £150mn for Liverpool’s Egyptian forward Mo Salah on transfer deadline day. The offer was rejected.

Calum Ross, assistant director at Deloitte’s sports business group, said the Saudi spending spree had ‘‘added to the mix in terms of Premier League clubs’ ability to spend’’, but that the new source of activity would make windows ‘‘increasingly competitive’’.

Total spending across Europe’s big five leagues in England, Spain, Germany, Italy and France rose to €5.7bn from €4.5bn last year, owing to big money signings such as Harry Kane’s move to Bayern Munich and Jude Bellingham’s arrival at Real Madrid. Fees for both the England internationals topped €100mn.

In France, Qatar-owned PSG were again the big spenders, topped off by a last-minute deal for French international Randal Kolo Muani from Eintracht Frankfurt for €95mn.

As spending continues to rise, football authorities are looking at ways to put a lid on costs. Uefa, European football’s governing body, introduced rules this summer that require teams participating in continental competitions to limit the cost of their playing staff to 90 per cent of revenue. That ceiling is due to drop to 70 per cent over the next two years. The Premier League is exploring a similar system.

Ross said the impact of those new rules would gradually be felt in the transfer market as clubs begin to adjust.

‘‘We’re in a bit of a transitional phase’’, he said. ‘‘I think it’s having an effect on activity, in terms of the time it’s taking to do a deal. Clubs are having to be more in top of where they are financially and where they line up against the rules.’’

FRANKFURT, Sept 1 (Reuters) - German Chancellor Olaf Scholz said he is against a new nuclear power debate in the country, in an interview released late on Friday with German radio station Deutschlandfunk.

"The issue of nuclear power is a dead horse in Germany," said Scholz, leader of Germany's social democrats (SPD).

Scholz's coalition partner, the free democrats (FDP), recently demanded Germany should keep an nuclear option.

For new nuclear power plants to be built, significant time and investment would be required, Scholz said, estimating at least 15 billion euros ($16.16 billion) would have to be spent per power plant over the next 15 years.

On the widely debated topic of an industrial electricity price cap in Germany, the chancellor expressed doubt how this could be funded, naming options including taxpayer money and debt.