Ford Tesla EV shipment deal is putting pressure on GM

  • A surprise deal between Ford Motor and Tesla on electric vehicle charging technology and infrastructure could put new pressure on other automakers’ EV strategies.
  • Ford CEO Jim Farley and Tesla CEO Elon Musk announced the deal Thursday during a live audio discussion on Twitter Spaces.
  • RBC Capital analyst Tom Narayan said the Ford-Tesla deal could be negative in the near term for GM and other automakers.

DETROIT — A surprise deal between Ford Motor and Tesla on electric vehicle charging technology and infrastructure could put new pressure on other automakers’ EV strategies.

The relationship between the two competitors will give Ford owners access to more than 12,000 Tesla Superchargers across the United States and Canada, starting early next year. More importantly, Ford’s next generation of electric cars — expected by the middle of the decade — will use a Tesla charging plug, allowing Ford owners to charge in Tesla Superchargers without an adapter.

The agreement will make Ford among 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 discussion on the day Twitter Spaces. On Friday morning, Farley acknowledged that the tie-up would create challenges for Ford’s competitors.

“I think General Motors and others will have a great choice,” he said on CNBC’s “Squawk Box.”

Farley’s comments indicated which EV plug should be standard for charging in the US. The charger known as CCS is now the industry standard. Tesla cars and their Supercharger network use what is known as NACS. Other vehicles can use both, but they need an adapter.

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“The CCS is pretty standard, but it was largely done by a committee, and I think GM and others will have a great choice,” Farley told CNBC. “Do they want to have fast shipping for customers? Or do they want to stick to their standards and charge less?”

Ford stock rose more than 7% during Friday trading, above $12 per share. Tesla stock rose more than 5%, crossing $194 a share.

The Ford-Tesla deal could prove negative in the near term for GM and other automakers that don’t have access to many fast chargers, which are crucial to expanding adoption of electric vehicles, said RBC Capital analyst Tom Narayan.

“The news is clearly positive for Ford stock today (and possibly negative near-term for GM/STLA), but ultimately, we think this should be seen as Tesla playing the long game,” Narayan said in an investor note on Friday.

Tesla says it has approximately 45,000 Supercharger Connectors worldwide at 4,947 Supercharger stations. The company does not separate how many are located in the United States US Department of Energy Reports indicate that the country has only about 5,300 CCS fast chargers.

Without specifically addressing Farley’s comments, GM said it “believes that open charging networks and standards are the best way forward to enable the adoption of electric vehicles across the industry.” GM said it is working with a group of companies and the Society of Automotive Engineers to develop and further improve the open connector standard for CCS, which it said was important to “building an open fast charging network across North America.”

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The Detroit automaker has announced several partnerships with electric vehicle charging providers and has pushed 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.

Farley said Thursday that Ford is “fully committed” to a single US charging protocol that includes a Tesla plug-in port.

When Musk announced the deal with Farley, he indicated that other automakers are able to use the Tesla Supercharger network and The company’s shipping outlets.

“Working with Ford, and maybe others, can make it the North American standard, and 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.

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Tesla previously discussed opening up its own network to other electric vehicles. White House officials announced in February that Tesla committed to opening 7,500 of its charging stations to non-Tesla EV drivers by the end of 2024.

Public charging of electric vehicles is a major concern for potential buyers, and no automaker other than Tesla has succeeded in building its own network. Instead, they advertise partnerships with outside companies that often prove unreliable and frustrating for owners.

Most motorists in the United States log miles from home to nearby locations. But EV buyers who want to take longer road trips, or who don’t have access to a garage with a charger, often worry about accessing reliable public charging.

The problem is getting worse: At least one in five charging attempts by drivers failed last year, according to A study on general freight Released earlier this year by JD Power.

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Tesla superchargers are rated the best for overall customer satisfaction, according to a separate new study from JD Power.

Wolfe Research analyst Rod Lash called the deal a “win-win” because it 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 pain point for its electric vehicle customers, who would otherwise have to use third-party charging providers,” he said in an investor note on Friday. Meanwhile, for Tesla, adding Ford customers will help boost network utilization, a key driver of profitability.

Jim Farley and Elon Musk

Getty Images

Morningstar analyst David Weston said the deal is a major boost to access to fast chargers for Ford and its customers. He added that it “puts some pressure on the other legacy automakers but if you’re someone like General Motors, I don’t think you need to panic.”

Weston said he would like to know more about the deal, such as cost, length and other details that have not been made public.

A Ford spokesperson said more information about the deal will be released around the time Tesla Chargers open up to Ford owners early next year.

CNBC channel Michael BlumAnd Laura Kolodny And John Rosevear Contribute to this report.

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