By Abhirup Roy
SAN FRANCISCO (Reuters) -Texas on Wednesday approved its plan to require companies to include Tesla (NASDAQ:TSLA)'s technology in electric vehicle (EV) charging stations to be eligible for federal funds, despite calls for more time to re-engineer and test the connectors.
The decision by Texas - the biggest recipient of a $5 billion program meant to electrify U.S. highways - is being closely watched by other states and is a step forward for Tesla CEO Elon Musk's plans to make its technology the U.S. charging standard.
Tesla's efforts are facing early tests as some states start rolling out the funds. The company won a slew of projects in Pennsylvania's first round of funding announced on Monday but none last month in Ohio.
Federal rules require companies to offer the rival Combined Charging System (CCS) - a U.S. standard that has been preferred by the Biden administration - as a minimum to be eligible for the funds.
But individual states can add their own requirements on top of CCS before distributing the federal funds at a local level.
Ford Motor (NYSE:F) and General Motors (NYSE:GM)' announcement just over two months ago that they planned to adopt Tesla's North American Charging Standard (NACS) sent shockwaves through the industry and prompted a number of automakers and charging companies to embrace the technology.
In June, Reuters reported that Texas - which will receive and deploy $407.8 million over five years - planned to mandate companies to include Tesla's plugs. Washington state has talked about similar plans and Kentucky has already mandated it.
Florida, another major recipient of funds, recently revised it plans, saying it would mandate NACS one year after standards body SAE International, which is reviewing the technology, formally recognizes it.
Some charging companies wrote to the Texas Transportation Commission, opposing the requirement in the first round of funds and citing concerns about the supply chain and certification of Tesla's connectors, saying it would put the successful deployment of EV chargers at risk.
That forced Texas to defer a vote on the plan twice as it sought to understand NACS and its implications, before the commission voted unanimously to approve the plan on Wednesday.
"The two-connector approach being proposed will help assure coverage of a minimum of 97% of the current, over 168,000 electric vehicles with fast charge ports in the state," Humberto Gonzalez, a director at Texas' department of transportation said while presenting the state's plan to the commissioners.