June 8 (Portal) – General Motors (GM.N) will join forces with Ford (FN) to adopt Tesla’s North American charging connector standard (TSLA.O), giving buyers of GM electric vehicles access to the Tesla Supercharger network under an agreement published on grant Thursday.
GM’s move, which follows a similar decision by Ford to adopt Tesla’s charging connector standard, means three of the largest electric vehicle sellers in the North American market have now agreed on a standard for charging hardware. The agreement was announced by GM CEO Mary Barra and Tesla CEO Elon Musk in a Twitter Spaces event.
Investors welcomed the deal and the prospect of a unified charging hardware standard for the North American market. GM shares were up more than 4% after the bell, and Tesla shares were up 4%.
The alliance between the top three competing US electric vehicle manufacturers has significant implications for trade and public policy.
The Biden administration made the adoption of a competing Combined Charging System (CCS) standard a requirement for companies to be eligible for billions of dollars in federal grants for new charging stations on some 7,500 miles (12,070 km) of the nation’s busiest roads. The alliance between Tesla, Ford and GM questions the direction of the White House.
But Transport Secretary Pete Buttigieg told CNBC in May after the Ford-Tesla deal that the industry would eventually converge on one system, but that adapters would allow cross-use.
Tesla, GM, and Ford together account for about 70% of current U.S. electric vehicle sales. Industry executives see different EV charging ports as a barrier to broader consumer adoption of EVs.
“I think that’s going to be a fundamentally great thing for EV development,” Musk said during the Twitter Spaces conversation with Barra.
“I think things have gotten a little bit better,” Barra said.
The agreement could save GM $400 million, Barra said in an interview with CNBC on Thursday.
[1/2] A newly installed car charger at a Tesla Super Charging Station is shown on September 14, 2018 in Carlsbad, California, United States. Portal/Mike Blake
‘SNOWBALL EFFECT’
From a consumer perspective, the deals with Detroit automakers appear to be a win for Tesla, which has invested heavily in deploying its signature fast-charging stations across North America, while most other automakers have delegated charging to third parties.
According to US Department of Energy data, Tesla Superchargers account for approximately 60% of all fast chargers in the United States and Canada.
“That’s pretty big,” said Chris Harto, senior policy analyst at Consumer Reports. “I would imagine that this is kind of a snowball effect, with more and more automakers getting involved and moving to the Tesla standard.”
For GM and Ford, the deals are a bet that the benefits of having access to Tesla’s extensive fast-charging network will outweigh the risk that their customers will like what they see and make them choose Tesla the next time they shop.
The alliance between Tesla, GM and Ford puts pressure on other automakers and independent charging network operators who have adopted the CCS standard. A US transition to the Tesla standard could be difficult for competing charging station makers already settling in the US to make devices that comply with CCS standards.
“It makes it much more likely that NACS will prevail over CCS in North America,” said David Whiston of Morningstar Research, referring to Tesla’s North American charging standard. Other charging providers could continue to use the CCS standard and rely on adapters to serve Tesla, Ford and GM vehicles, he added.
Shares in charging companies ChargePoint (CHPT.N) and EVgo (EVGO.O) each fell more than 4% in after-hours trading on Thursday.
GM announced that by 2025 electric vehicles will be equipped with connectors based on the Tesla North American Charging Standard design. Next year, current GM EV owners will be able to take advantage of 12,000 Tesla Fast Chargers in North America, and adapters will be made available.
Musk said Tesla “won’t do anything to favor Teslas” as more competing brands access the Supercharger network. “There will be a level playing field… The most important thing is that we drive the electric vehicle revolution.”
Ford CEO Jim Farley had a similar discussion with Musk on Twitter last month, announcing that the second-biggest US automaker had reached an agreement with Tesla to give its electric vehicle owners access to more than 12,000 Tesla Superchargers in early 2024 enable North America.
Reporting by David Shepardson in Washington and Joseph White in Detroit. Additional reporting by Hyun Joo Jin and Abhirup Roy in San Francisco, Kannaki Deka and Niket Nishant in Bengaluru, and Jarrett Renshaw in Philadelphia. Edited by Peter Henderson, Sayantani Ghosh and Matthew Lewis
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