Ford’s EV Charging Deal With Tesla Puts Pressure on GM, Other Rival Automakers

In a surprising development, Ford Motor and Tesla have entered into a deal concerning electric vehicle (EV) charging technology and infrastructure.

This collaboration has the potential to create new challenges for other automakers in their EV strategies.

The agreement will grant Ford owners access to over 12,000 Tesla Superchargers across the United States and Canada, starting in the near future.

Additionally, Ford’s upcoming generation of EVs, anticipated to be released by mid-decade, will incorporate Tesla’s charging plug, enabling Ford vehicle owners to charge at Tesla Superchargers without requiring an adapter.

The partnership positions Ford as one of the first automakers to explicitly join the Tesla charging network. Ford CEO Jim Farley and Tesla CEO Elon Musk made the announcement during a live discussion on Twitter Spaces.

Farley acknowledged that this collaboration would present challenges for Ford’s competitors, suggesting that other automakers, like GM, would face a crucial choice regarding the standard charging plug for EVs in the United States.

Currently, the industry norm is the CCS charger, while Tesla vehicles and the Supercharger network use NACS.

Farley emphasized the importance of fast charging for customers and implied that sticking to a specific standard could limit charging options.

Following the announcement, both Ford and Tesla experienced positive market reactions, with Ford’s stock rising by 6.2% and Tesla’s shares climbing by 4.7%.

Analysts, such as Tom Narayan from RBC Capital, believe that while this deal benefits Ford in the short term, it could negatively impact competitors like GM and Stellantis, which lack access to as many fast chargers.

Tesla’s extensive Supercharger network, with approximately 45,000 connectors worldwide, is seen as crucial for expanding EV adoption, especially when compared to the limited number of CCS fast chargers in the United States, which stands at around 5,300, according to the U.S. Department of Energy.

General Motors responded to Farley’s comments by stating its belief in open charging networks and standards as the best approach to facilitate widespread EV adoption across the industry.
GM highlighted its collaboration with SAE International to develop an open connector standard for CCS, which is vital for establishing a comprehensive network of fast chargers in North America.

Although Ford has committed to a single U.S. charging protocol that includes Tesla’s plug port, other automakers may also have the opportunity to utilize Tesla’s Supercharger network and charging ports, as indicated by Musk.

Public charging infrastructure remains a significant concern for potential EV buyers, as building out a reliable network is a challenge for automakers other than Tesla.

The partnership between Ford and Tesla addresses this issue by providing Ford customers with increased access to fast chargers.

Wolfe Research analyst Rod Lache views this deal as mutually beneficial, expanding the reach of fast-charging options for Ford customers while boosting the utilization of Tesla’s network, which contributes to profitability.

Overall, the Ford-Tesla collaboration marks a substantial improvement in fast-charging accessibility for Ford and its customers.

While it puts pressure on legacy automakers, particularly in terms of charging infrastructure, analysts like David Whiston from Morningstar suggest that panic may not be necessary for companies like GM.

Further details regarding the agreement, including costs and duration, will be announced closer to the opening of Tesla’s chargers to Ford owners in the coming year.