Ford Tesla EV charging deal puts pressure on GM

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 partnership between the 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, Ford’s next generation of electric cars – expected by the middle of the decade – will use Tesla’s charging plug, allowing owners of Ford vehicles to charge without an adapter at Tesla Superchargers.

The agreement 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 on Twitter spaces. On Friday morning, Farley acknowledged that the partnership would pose challenges for Ford’s rivals.

“I think GM and others will have a big choice to make,” 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 the Supercharger network use what is known as NACS. Other vehicles can use both, but require an adapter.

“The CCS is a great standard, but it was kind of done by some kind of committee, and I think GM and others are going to have to make a big choice,” Farley told CNBC. “Do they want fast charging for customers? Or do they want to stick to their standard and charge less?

Ford’s stock rose more than 7% during Friday trading, more than $12 a share. Tesla’s stock climbed more than 5% to finish at $194 per share.

The Ford-Tesla deal could have a short-term negative impact on GM and other automakers who don’t have access to so many fast chargers, which are seen as critical to expanding electric vehicle adoption, RBC Capital analyst Tom Narayan said.

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

Tesla says it has about 45,000 Supercharger connectors at 4,947 Supercharger stations worldwide. The company does not disclose how many there are in the US. The US Department of Energy reports that the country has only about 5,300 CCS fast chargers.

General Motors, without commenting specifically on Farley’s comments, said it “believes that open charging networks and standards are the best way to enable EV adoption across the industry.” 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.

The Detroit automaker has announced several partnerships with EV charging providers and lobbied for more federal support for such infrastructure.

Stellantis, which named Narayan as another company that could feel the effects of the Ford-Tesla deal, did not immediately respond to a request for comment.

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

When Musk announced the deal with Farley, he hinted that other automakers could use the Tesla Supercharger network and the company’s charging ports.

“By working with Ford, and maybe others, it can become the North American standard. I think consumers will all benefit from it,” Musk said Thursday.

Tesla previously discussed opening up its private network to other EVs. White House officials announced in February that Tesla has 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 successfully built out its own network. Instead, they’ve announced partnerships with outside companies that have often proven unreliable and frustrating for owners.

Most American drivers log vehicle miles from home to nearby locations. But electric car buyers who want to take longer car trips, or who don’t have access to a garage with a charger, often worry about access to reliable, public charging.

The problem is getting worse: Last year, at least one in five drivers’ charging attempts failed, according to a public charging study released earlier this year by JD Power.

According to a separate new study by JD Power, Tesla’s Superchargers were ranked top for overall customer satisfaction.

Wolfe Research analyst Rod Lache called the deal a “win-win” as it more than doubles Ford customers’ access to fast chargers and increases usage of the Tesla network.

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

The deal is a major boost to fast charging access for Ford and its customers, said Morningstar analyst David Whiston. He added that it “puts pressure on some other automakers, but if you’re someone like GM, I don’t think you need to 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.

– CNBCs Michael Bloom, Lora Kolodny And John Roseveer contributed to this report.