DETROIT – A surprise agreement between Ford engine And You’re here on electric vehicle charging technology and infrastructure could put further pressure on the EV strategies of other automakers.
The merger between the two rivals will give Ford owners access to more than 12,000 Tesla Superchargers in the United States and Canada, starting early next year. More importantly, Ford’s next generation of electric vehicles, expected by mid-decade, will use Tesla’s charging socket, allowing Ford vehicle owners to charge on Tesla superchargers without an adapter.
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The deal will make Ford one of the first automakers to explicitly connect to the network.
Ford CEO Jim Farley and Tesla CEO Elon Musk announced the deal Thursday during a live audio chat on Twitter spaces. On Friday morning, Farley acknowledged the tie-up would create challenges for Ford’s rivals.
“I think GM and others are going to have a big choice to make,” he said on CNBC’s “Squawk Box.”
Farley’s comments referenced the EV plug which should be the standard for charging in the United States. A charger known as CCS is now the industry standard. Tesla vehicles and its Supercharger network use something called NACS. Other vehicles can use both, but they need an adapter.
“The CCS is a great standard, but it was done by some kind of committee, and I think GM and others are going to have a big choice to make,” Farley told CNBC. “Do they want to have fast charging for customers? Or do they want to stick to their standard and have less refill?
Ford shares were up more than 7% during Friday’s session, above $12 per share. Tesla shares also climbed more than 6%, topping $195.
The Ford-Tesla deal could be negative in the short term for GM and other automakers who don’t have access to as many fast chargers, which are seen as crucial to expanding EV adoption, Tom Narayan said. , analyst at RBC Capital.
“The news is obviously positive for Ford stocks today (and potentially negative in the near term for GM/STLA), but ultimately we think this should be viewed as Tesla playing the long game,” Narayan said. in a note to investors on Friday.
Tesla says it has around 45,000 supercharger connectors worldwide at 4,947 supercharger stations. The company does not specify how many are in the United States. US Department of Energy reports that the country has only about 5,300 CCS fast chargers.
General Engines, without specifically addressing Farley’s comments, said Friday that he “believes that open charging networks and standards are the best path forward to enable industry adoption of electric vehicles.” GM said it was working with a group of companies and SAE International, formerly the Society of Automotive Engineers, to develop and continue to refine an open connector standard for CCS, which it said was important for “building ‘an open fast charging network’. across North America.”
The Detroit automaker announced several partnerships with electric vehicle charging providers and lobbied for increased federal support for such infrastructure.
Stellantis, which Narayan mentioned as another company that could feel the effects of the Ford-Tesla deal, did not immediately respond to a request for comment.
Ford is “fully committed” to a single US charging protocol that includes the Tesla plug port, Farley said Thursday.
Musk, when announcing the deal with Farley, hinted that other automakers could use the Tesla Supercharger network and company charging ports.
“Working with Ford, and maybe others, can make it the North American standard, I think consumers will be better off for it,” Musk said Thursday.
An all-electric Ford Mustang Mach-E at a Tesla Supercharger charging station.
Tesla had previously talked about opening up its private network to other electric vehicles. White House officials announced in February that Tesla had pledged to open 7,500 of its charging stations to non-Tesla electric vehicle drivers by the end of 2024.
Public electric vehicle charging is a major concern for potential buyers, and no automaker other than Tesla has successfully built its own network. Instead, they announced partnerships with third-party companies that often proved unreliable and frustrating for owners.
Most US drivers log vehicle miles between their home and nearby locations. But EV buyers who want to take longer trips, or who don’t have access to a garage with charger, often worry about access to reliable public charging.
The problem is getting worse: at least 1 in 5 charging attempts by drivers failed last year, according to a study on public charging released earlier this year by JD Power.
Tesla’s superchargers have been ranked among the best for overall customer satisfaction, according to a separate new study by JD Power.
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Wolfe Research analyst Rod Lache called the deal a “win-win” because it more than doubles Ford customers’ access to fast chargers and increases use of Tesla’s network.
“For Ford, access to Tesla’s network helps solve a major problem for their electric vehicle customers, who otherwise must use third-party charging providers,” he said in a note to investors on Friday. “In the meantime, for Tesla, the addition of Ford customers will help boost network usage, a key driver of profitability.”
Jim Farley and Elon Musk
The deal is a major boost to access to fast chargers for Ford and its customers, Morningstar analyst David Whiston said. He added that this “puts some pressure on other mainstream automakers, but if you’re someone like GM, I don’t think you need to panic.”
Whiston said he would like to know more about the deal, such as cost, duration and other details that were not announced.
A Ford spokesperson said more information about the deal will be announced closer to the opening of Tesla’s Chargers to Ford owners early next year.
– CNBC Michael Bloom, Lora Kolodny And John Rosevear contributed to this report.