What Ford, GM’s Tesla EV charging deal means for the industry

in a few weeks, ford motor, general motors and Tesla It appears to have changed the course of electric vehicle charging infrastructure in North America.

Tesla owners have long enjoyed reliable charging far from home with the company’s Supercharging Stations, the largest charging network in North America. But the whole charging industry is fragmented, and it hasn’t been so easy for non-Tesla owners.

All that will soon change.

Last month, Ford announced a deal with Tesla that: Ford EVs to use Tesla charging stations With the adapter, Tesla’s charging technology will become the standard for its EVs from 2025. It’s a surprising partnership between rivals, General Motors announced on Thursday. signed a similar contract with Tesla.

So why would Ford and GM partner with Tesla, which has been viewed by investors as a threat to incumbent automakers?

And what does that mean for EVs?

and study Last year, researchers at the University of California, Berkeley, tested 675 CCS fast chargers in the San Francisco Bay Area and found that nearly a quarter of them were not working. August 2022 study A JD Power survey found similar results for CCS chargers in other parts of the country. Notably, Tesla’s charging network also turned out to be far more reliable.

Tesla originally built its Supercharger network to overcome potential buyer concerns about charging during road trips. The reach and reliability of the fast-charging network was a key element of the company’s early sales pitch to customers nervous about going electric, and has been a key factor in the company’s success in the US ever since. .

In contrast, the volatility and poor reliability of the CCS network pose challenges for Ford and GM (and other automakers) as they look to expand sales of their EVs.

Potential buyers of Ford’s and GM’s EVs may love the test-driving experience, but without a reliable charging network, both put Tesla at a disadvantage. These new deals should go a long way toward leveling the playing field for billing.

Another reason to prefer Tesla’s NACS standard over CCS is that Tesla’s plug is significantly smaller and lighter than the CCS quick charge plug, which can be difficult for older or disabled drivers to use.

Both Ford and GM are keen to win over customers new to EVs, making accessibility a top priority.

For automakers like Ford and GM, which are betting billions on a large-scale transition to EVs, the issue of CCS charger reliability is seen as a potential barrier to wider adoption. there is GM said it plans to spend in 2021 $750 million to improve EV charging infrastructure in America and Canada.

But then Tesla Pioneered the NACS standard Last November, it released its technical specifications, inviting charging network operators and other automakers to use the plug design.

For both Ford and GM, the change offered shortcuts and potential. big savings.

“We believe we can save up to $400 million of the $150 million we originally allocated for this plan because we can do it faster and more effectively,” Barra said in an interview with CNBC on Thursday. That’s why,” he said. “Fast Money” After announcing a deal with Tesla.

For Ford CEO Jim Farley, the deals also signal a new era of collaboration between automakers beyond individual parts.

“we [worked with other automakers] In the ICE world, we’re working on transmissions and engines without anyone noticing,” Farley said at the Bernstein Conference on May 31. I think it’s one of the most interesting new dynamics he has. “

It also enjoys the tacit endorsement of its technology by longtime rivals, and will probably go after market share. Public EV charging subsidy It was made available under last year’s bipartisan infrastructure law.

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

The EV giant’s decision to publish the NACS standard means that competing charging network operators are free to add chargers with NACS plugs, and will almost certainly do so.

In fact, major companies have already responded to the Ford-GM deal.Swiss electronics giant ABBThe leading manufacturer of commercial EV chargers announced Friday that it will soon offer NACS plugs as an option for its products. Freewire Technologies, a California-based startup that develops fast chargers, has announced similar plans after Ford and Tesla signed a deal last month.

Tesla’s main motivation, at least in public, may be even simpler.

“Our mission is to accelerate the world’s transition to sustainable energy,” said Rebecca Tinucci, Tesla’s senior director of charging infrastructure, in a statement announcing the deal with GM on Thursday. “Providing ubiquitous and reliable charging access to all EV owners is fundamental to our mission.”