DETROIT – A surprising deal between Ford Motor and Tesla on EV charging technology and infrastructure could put new pressure on other automakers’ EV strategies.
The a tie between two rivals will give Ford owners access to more than 12,000 Tesla Superchargers in the US and Canada starting early next year. More importantly, the next generation of Ford electric cars – expected mid-decade – will use a Tesla charging plug, allowing Ford owners to charge on Tesla superchargers without an adapter.
The deal will make Ford one of the first automakers to explicitly join the network.
Ford CEO Jim Farley and Tesla CEO Elon Musk announced the deal Thursday during a live audio discussion Twitter Spaces. On Friday morning, Farley acknowledged the draw would be a challenge for Ford’s rivals.
“I think GM and others are going to have a lot of choice,” he said on CNBC’s “Squawk Box.”
Farley’s comments referred to which EV plug should be standard for charging in the US. A charger known as CCS is now the industry standard. Tesla vehicles and their Supercharger network use what is known as NACS. Other vehicles can use both but need an adapter.
“CCS is a great standard, but it’s pretty much done by some sort of committee, and I think GM and others will have a lot of choice,” Farley told CNBC. “Do they want to have fast charging for customers? Or do they want to stick to their standard and have less charging?
Ford shares rose more than 7% during Friday trading, above $12 a share. Tesla shares rose more than 5% to top $194 a share.
The Ford-Tesla deal could be a short-term negative for GM and other automakers that don’t have access to as many fast chargers, which are seen as key to expanding the adoption of electric cars, said RBC Capital analyst Tom Narayan.
“The news is clearly positive for Ford stock today (and potentially negative for GM/STLA in the near term), but ultimately we think it should be viewed as Tesla playing the long game,” Narayan said in a note to investors on Friday.
Tesla says it has roughly 45,000 Supercharger connectors at 4,947 Supercharger stations worldwide. The company doesn’t say how many are in the US US Department of Energy states that the country only has about 5,300 CCS fast chargers.
General Motors, without specifically addressing Farley’s comments, said it “believes that open charging networks and standards are the best way to enable industry-wide adoption of EVs.” GM said it is working with a group of companies and the Society of Automotive Engineers to develop and further refine an open connector standard for CCS, which it says is important to “building an open fast charging network in North America.”
The Detroit automaker has announced several partnerships with EV charging providers and has lobbied for more 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 “absolutely committed” to a single U.S. charging protocol that includes Tesla’s plug-in port, Farley said Thursday.
In announcing the deal with Farley, Musk hinted that other automakers could use Tesla’s Supercharger network and company charging ports.
“Working with Ford and maybe others to make it a North American standard, I think it’s going to be better for the consumer,” Musk said Thursday.
The all-electric Ford Mustang Mach-E at the Tesla Supercharger charging station.
Tesla has previously discussed opening up its private network to other electric cars. White House officials announced in February that Tesla has committed to making 7,500 of its charging stations available to non-Tesla drivers by the end of 2024.
Public charging of electric cars is a big concern for potential buyers, and no car company 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 American drivers log miles from home to nearby locations. But EV buyers who want to take longer trips or who don’t have access to a garage with a charger are often concerned about access to reliable public charging.
The problem is getting worse: at least one in five charging attempts by drivers failed last year study on public charging released earlier this year by JD Power.
According to a separate new study by JD Power, Tesla’s Superchargers were rated the best in terms of overall customer satisfaction.
Wall Street is bullish
Wolfe Research analyst Rod Lache called the deal a “win-win” because it more than doubles Ford customers’ access to fast chargers and increases Tesla’s network usage.
“Ford’s access to Tesla’s network helps solve a major problem for their EV customers who otherwise have to use third-party charging providers,” he said in a note to investors on Friday. “Meanwhile, for Tesla, the addition of Ford customers will help increase network utilization, a key driver of profitability.”
Jim Farley and Elon Musk
According to Morningstar analyst David Whiston, the deal represents a big boost for Ford and its customers in accessing fast chargers. He added that it “puts some pressure on other automakers, but if you’re someone like GM, I don’t think you should panic.”
Whiston said he would like to know more about the deal, such as cost, length and other details that have not been announced.
A Ford spokesman said more information about the deal will be announced closer to the opening of Tesla chargers to Ford owners early next year.
– CNBC Michael Bloom, Lora Kolodny and John Rosevear contributed to this report.