DETROIT – A surprise deal between Ford Motor and Tesla on electric vehicle charging technology and infrastructure could put latest pressure on other automakers’ EV strategies.
The tie-up between the 2 rivals will give Ford owners access to greater than 12,000 Tesla Superchargers across the U.S. and Canada, starting early next 12 months. More importantly, Ford’s next generation of EVs — expected by mid-decade — will use Tesla’s charging plug, allowing owners of Ford vehicles to charge at Tesla Superchargers without an adapter.
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The agreement will make Ford among the many first automakers to explicitly tie into the network.
Ford CEO Jim Farley and Tesla CEO Elon Musk announced the deal Thursday during a live audio discussion on Twitter Spaces. On Friday morning, Farley acknowledged the tie-up would create challenges for Ford’s rivals.
“I believe GM and others are going to have a good selection to make,” he said on CNBC’s “Squawk Box.”
Farley’s comments referenced which EV plug ought to be standard for charging within the U.S. A charger generally known as CCS is the industry norm now. Tesla vehicles and its Supercharger network use what’s generally known as NACS. Other vehicles can use each, but they need an adapter.
“The CCS is an incredible standard, however it was just about done by sort of a committee, and I believe GM and others are going to have a good selection to make,” Farley told CNBC. “Do they wish to have fast charging for purchasers? Or do they wish to keep on with their standard and have less charging?
Ford’s stock rose by 6.2% Friday, closing at $12.09 per share. Tesla’s shares also climbed 4.7% Friday, ending the week at $193.17.
The Ford-Tesla deal might be a near-term negative for GM, Stellantis and other automakers that do not have access to as many fast chargers, that are considered crucial to expand EV adoption, said RBC Capital analyst Tom Narayan
“The news is clearly a positive for Ford shares today (and potentially near term negative for GM/STLA), but ultimately, we predict this ought to be viewed as Tesla playing the long game,” Narayan said in a Friday investor note.
Tesla says it has roughly 45,000 Supercharger connectors worldwide at 4,947 Supercharger Stations. The corporate doesn’t break out what number of are within the U.S. The U.S. Department of Energy reports the country only has about 5,300 CCS fast chargers.
General Motors, without specifically addressing Farley’s comments, said Friday it “believes that open charging networks and standards are one of the simplest ways forward to enable EV adoption across the industry.” GM said it’s working with a gaggle of corporations and SAE International, formerly the Society of Automotive Engineers, to develop and proceed to refine an open connector standard for CCS, which it said was necessary for “the buildout of an open network of fast charging across North America.”
The Detroit automaker has announced several partnerships with EV charging providers and lobbied for more federal support for such infrastructure.
‘Totally committed’
Ford is “totally committed” to a single U.S. charging protocol that features the Tesla plug port, Farley said Thursday.
Musk, when announcing the take care of Farley, alluded to other automakers having the ability to use the Tesla Supercharger network and the corporate’s charging ports.
“Working with Ford, and maybe others, could make it the North American standard, I believe that buyers will likely be all higher for it,” Musk said Thursday.
An all-electric Ford Mustang Mach-E at a Tesla Supercharger station charging.
Ford
Tesla previously discussed opening its private network to other EVs. White House officials announced in February that Tesla committed to opening up 7,500 of its charging stations to non-Tesla EV drivers by the top of 2024.
Public charging of electrical vehicles is a serious concern for potential buyers, and no automaker apart from Tesla has successfully built out its own network. As an alternative, they’ve announced partnerships with third-party corporations which have often proven unreliable and frustrating to owners.
Most U.S. drivers log vehicle miles from home to locations nearby. But EV buyers who wish to take longer road trips, or who should not have access to a garage with a charger, often worry about access to reliable, public charging.
The problem is getting worse: not less than 1 in 5 charging attempts by drivers failed last 12 months, in response to a study on public charging released last 12 months by J.D. Power.
Tesla’s Superchargers were ranked the most effective for overall customer satisfaction, in response to a separate latest study from J.D. Power.
Wall Street bullish
Wolfe Research analyst Rod Lache called the deal a “win-win,” because it greater than doubles Ford customers’ access to fast chargers and increases Tesla’s network’s utilization.
“For Ford, access to Tesla’s network helps solve a serious pain-point for his or her EV customers, who otherwise must use third-party charging providers,” he said in a Friday investor note. “Meanwhile, for Tesla, adding Ford customers will help boost network utilization, a key driver of profitability.”
Jim Farley and Elon Musk
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The deal is a serious boost to access to fast-chargers for Ford and its customers, Morningstar analyst David Whiston said. He added that it “puts some pressure on other legacy automakers but if you happen to are someone like GM, I do not think you’ll want to panic.”
Whiston said he would love to know more in regards to the deal, akin to cost, length and other details that weren’t announced.
A Ford spokesman said more information in regards to the agreement will likely be announced closer to Tesla’s chargers opening as much as Ford owners early next 12 months.
– CNBC’s Michael Bloom, Lora Kolodny and John Rosevear contributed to this report.
Clarification: This story has been updated to make clear that SAE International was formerly generally known as the Society of Automotive Engineers.