Ford Tesla EV charging deal puts pressure on GM
DETROIT – Surprise deal between Ford Motor And Tesla EV charging technologies and infrastructure could put new pressure on other automakers’ EV strategies.
The combination of the two competitors will give Ford owners access to more than 12,000 Tesla superchargers in the US and Canada starting early next year. More importantly, Ford’s next generation of electric vehicles, expected by mid-decade, will use a Tesla charging plug, allowing Ford owners to charge from a Tesla Supercharger without an adapter.
The agreement will make Ford one of the first automakers to connect directly to the grid.
Ford CEO Jim Farley and Tesla CEO Elon Musk announced the deal on Thursday during a live audio discussion on Twitter spaces. Farley admitted Friday morning that the merger would create problems for Ford’s competitors.
“I think GM and others have a big choice to make,” he said on CNBC’s Squawk Box.
Farley’s comments mention which EV plug should be the standard charging plug in the US. The charger, known as CCS, is now the industry norm. Tesla vehicles and its Supercharger network use what is known as NACS. Other cars can use both but need an adapter.
“CCS is a great standard, but it was pretty much designed by some sort of committee, and I think there’s a lot of choice for GM and others to make,” Farley told CNBC. “Do they want to have fast charging for customers? Or do they want to stick to their standard and charge less?
Ford shares rose more than 7% during Friday trading to top $12 a share. Tesla shares rose more than 5% to over $194 per share.
The Ford-Tesla deal could be negative in the short term for GM and other automakers that don’t have access to so many fast chargers deemed critical to expanding EV adoption, said RBC Capital analyst Tom Narayan.
“The news is certainly positive for Ford stock today (and possibly negative for GM/STLA in the short term), but ultimately we think this should be seen as Tesla playing the long game.” Narayan said in a Friday note to investors.
Tesla says it has about 45,000 Supercharger sockets worldwide at 4,947 Supercharger stations. The company does not disclose how many there are in the US. US Department of Energy reports that there are only about 5,300 CCS fast chargers in the country.
General Motors, without specifically addressing Farley’s comments, said he “believes that open charging networks and standards are the best way forward to ensure the adoption of electric vehicles in the industry.” GM said it is working with a group of companies and the Society of Automotive Engineers to develop and further improve the open connector standard for CCS, which it says is important to “creating an open fast charging network in North America.”
The Detroit automaker has announced several partnerships with electric vehicle charger suppliers and has lobbied for more federal support for such infrastructure.
Stellantis, which Narayan mentioned as another company that could feel the impact of the Ford-Tesla deal, did not immediately respond to a request for comment.
Farley said Thursday that Ford is “fully committed” to a single U.S. charging protocol that includes a Tesla plug port.
Musk, when announcing the Farley deal, mentioned that other automakers could use the Tesla Supercharger network and charging ports of the company.
“Working with Ford and possibly others could make it the North American standard, and I think consumers will benefit from that,” Musk said Thursday.
An all-electric Ford Mustang Mach-E at a Tesla Supercharger charging station.
Tesla has previously discussed opening its private network to other electric vehicles. White House officials announced in February that Tesla has committed to open 7,500 of its charging stations to non-Tesla electric vehicle drivers by the end of 2024.
Public charging of electric vehicles is a major concern for potential buyers, and no automaker other than Tesla has built its own network. Instead, they announced partnerships with third-party companies that often proved unreliable and frustrated owners.
Most drivers in the US record miles from home to nearby places. But EV buyers who want to make longer trips or who don’t have access to a charging garage often worry about accessing reliable public charging.
The problem is getting worse: at least one in five attempts to charge drivers last year failed. public charge research released earlier this year by JD Power.
According to a separate new study by JD Power, Tesla superchargers were ranked the best in overall customer satisfaction.
Wall Street bullish
Wolfe Research analyst Rod Lusch called the deal a “win-win” as it more than doubles Ford customers’ access to fast chargers and increases Tesla’s grid usage.
“For Ford, access to the Tesla network helps solve a major problem for their electric vehicle buyers who otherwise have to use third-party charging service providers,” he said in a Friday note to investors. “Meanwhile, for Tesla, adding Ford customers will help increase network usage, which is a key driver of profitability.”
Jim Farley and Elon Musk
According to Morningstar analyst David Whiston, the deal is a big boost to access fast-charging devices for Ford and its customers. He added that it “puts some pressure on other legacy automakers, but if you’re like GM, I don’t think you need to panic.”
Whiston said he would like to know more about the deal, such as the cost, duration and other details that have not been announced.
A Ford spokesman said more details about the deal will be announced closer to the opening of Tesla chargers to Ford owners early next year.
– CNBC Michael Bloom, Laura Kolodny And John Rosewear contributed to this report.