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What Tesla EV charging deals with Ford, GM means for the industry

TESLA logo on a charging station on May 26, 2023 in Merklingen, Germany.

Harry Langer/ | Pictures of Defodi | Getty Images

Within weeks, Ford Motor, General Motors And You’re here seem to have changed the course of electric vehicle charging infrastructure in North America.

Tesla owners have long enjoyed reliable charging away from home at the company’s supercharging stations, by far the largest charging network in North America. But the charging industry as a whole has been fragmented, and non-Tesla owners haven’t had it as easy.

All of that will soon change.

Last month, Ford announced it had reached an agreement with Tesla that will allow Ford electric vehicles to use Tesla’s charging stations with an adapter – and that from 2025 it will set the standard for charging technology of Tesla on its own electric vehicles. It was a surprising partnership between rivals, and on Thursday General Motors said it had struck a nearly identical deal with Tesla.

So why would Ford and GM partner with Tesla, a company long seen by investors as a threat to established automakers?

And what does this mean for electric vehicles?

Unified charging

Tesla’s superchargers use a proprietary plug design, called the North American Charging Standard, or NACS, that doesn’t work with non-Tesla electric vehicles. Most other electric vehicles and charging stations in the United States use the public domain CCS (Combined Charging System) plug standard.

Currently, Tesla electric vehicles can use CCS chargers with an adapter, but only Teslas can use NACS chargers.

This means that while Tesla owners have access to the company’s plentiful and reliable fast-charging stations, non-Tesla EV drivers who use CCS have faced a hodgepodge of networks and often scarce equipment. reliable.

The shortcomings of CCS are of growing concern to Detroit automakers as they ramp up production of electric vehicles in hopes of selling their electrified models to the masses.

In a study last year, researchers from the University of California, Berkeley checked 675 CCS fast chargers in the San Francisco Bay Area and found that almost a quarter of them were not functional. An August 2022 study by JD Power found similar results for CCS chargers in other parts of the country. Notably, he also found that Tesla’s charging network was much more reliable.

Tesla originally built the Supercharger network to overcome potential buyers’ concerns about charging while on the road. The breadth and reliability of its fast-charging network was a key part of its initial sales pitch to customers nervous about going electric – and it’s been a key part of the company’s success. company in the United States since.

By contrast, the erratic and less-than-stellar reliability of the CCS network has been a challenge for Ford and GM (and other automakers) as they aim to boost sales of their own electric vehicles.

Potential buyers of a Ford or GM EV might like what they experience on a test drive, but without a reliable charging network both have been put at a disadvantage by Tesla. These new offers should go a long way towards leveling the playing field.

Another reason to favor Tesla’s NACS standard over CCS: Tesla’s plugs are considerably smaller and lighter than CCS fast-charging plugs, which can be cumbersome for older or disabled drivers.

With Ford and GM eager to win customers new to electric vehicles, improving affordability is a top priority.

Shortened savings

For automakers like Ford and GM betting billions on a big shift to electric vehicles, CCS charger reliability issues have been seen as a potential roadblock to wider adoption. GM said in 2021 it plans to spend $750 million to improve electric vehicle charging infrastructure in the United States and Canada.

But then Tesla opened up the NACS standard last November, releasing the technical specifications and inviting charging network operators and other automakers to use its plug design.

For Ford and GM, this change offered a shortcut – and the opportunity for big savings.

“We think we can save up to $400 million of the three-quarters of a billion dollars originally allocated to this because we were able to do it faster and more efficiently,” Barra said in an interview with CNBC on Thursday. Fast Money” after announcing the deal with Tesla.

For Ford CEO Jim Farley, the deals also signal what he sees as a new era of collaboration between automakers that goes beyond individual components.

“We [worked with other automakers] about transmissions and motors without anyone in the ICE world noticing,” Farley said at a conference in Bernstein on May 31. “Now it’s going to be more on the tech side. I think that’s one of the most interesting new dynamics.”

And Tesla?

So what does Tesla get out of the deal to allow rivals to use its superior charging network?

The EV leader is sure to appreciate the extra revenue it receives from Ford and GM EV owners every time they charge at a supercharger station.

It will also benefit from the implicit endorsement of its technology by longtime rivals, and it will likely seek a share of the public electric vehicle charging subsidies made available under last year’s bipartisan Infrastructure Act.

But the deals don’t mean Tesla will get a monopoly on public charging in the United States, even if all automakers eventually adopt the NACS standard.

The electric vehicle giant’s decision to go public with the NACS standard means competing charging network operators are also free to add chargers with NACS sockets – and they almost certainly will.

In fact, major players are already reacting to the Ford and GM deals. Swiss electrical equipment giant ABB, a leading maker of commercial electric vehicle chargers, said Friday it will soon offer NACS sockets as an option on its products. FreeWire Technologies, a California-based startup that makes fast chargers, announced similar plans after Ford’s deal with Tesla last month.

Tesla’s main motivation – at least in public – is perhaps even simpler.

“Our mission is to accelerate the global transition to sustainable energy,” said Rebecca Tinucci, senior director of charging infrastructure at Tesla, in a statement announcing the agreement with GM on Thursday. “Giving every electric vehicle owner access to ubiquitous and reliable charging is the cornerstone of this mission.”


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