How The Tesla-Ford Partnership Pressures GM, Others

Tesla’s decision to open its Supercharger stations to Ford electric vehicles came as a surprise to many, though the automaker has discussed widening the reach of its charging network for years. With Ford owners now gaining access to the largest U.S. fast-charging network, other automakers like General Motors may be confronted with a difficult road ahead.

Above: Tesla EVs charging at a Supercharger station (Image: Casey Murphy / EVANNEX).

In early 2024, Ford EV owners are expected to gain access to the Supercharger network of over 12,000 charging stalls in the U.S. and Canada, as CNBC reports. Additionally, Ford’s next generation of EVs will include the Tesla-developed North American Charging Standard plug, rather than the CCS plug.

The news was revealed by Ford CEO Jim Farley in a Twitter Spaces call last week with Tesla head Elon Musk. As a result, Farley says, GM faces a tough dilemma.

“I think GM and others are going to have a big choice to make,” Farley told CNBC on a segment of “Squawk Box.”

“The CCS is a great standard, but it was pretty much done by kind of a 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 charging?”

Although GM didn’t respond specifically to Farley, the company stated on Friday that it “believes that open charging networks and standards are the best way forward to enable EV adoption across the industry.” The company added that it is working on another open connector standard for CCS with SAE International and other companies, which says are crucial for “the buildout of an open network of fast charging across North America.”

Above: Ford CEO Jim Farley on new Ford-Tesla EV partnership: 'It's a bet for our customers' (Video: CNBC).

Analysts say that the news may be a negative in the near term for GM and others, as access to charging stations plays a huge role in consumer interest in EVs, according to RBC Capital analyst Tom Narayan.

“The news is obviously a positive for Ford shares today (and potentially near term negative for GM/STLA), but ultimately, we think this should be viewed as Tesla playing the long game,” Narayan wrote in a note to investors.

With the news, it seems Tesla is winning the battle for a charging standard, as Ford and startup EV solar automaker Aptera have adopted the NACS. The news is also good for Ford owners, and the results of the shift could further influence other automakers to make the switch, according to Wolfe Research analyst Rod Lache.

“For Ford, access to Tesla’s network helps solve a major pain-point for their EV customers, who otherwise have to use third-party charging providers,” Lache said to investors in a note on Friday. “Meanwhile, for Tesla, adding Ford customers will help boost network utilization, a key driver of profitability.”

Morningstar analyst David Whiston says the Tesla-Ford partnership “puts some pressure on other legacy automakers,” adding that, “if you are someone like GM, I don’t think you need to panic.”

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