The North American electric vehicle charging business has been until now a fragmented affair. The best charging system, Tesla’s Supercharger network, was more or less a walled garden.
Rival EV manufacturers and the Biden Administration were committed to charging connector hardware that didn’t work with the Tesla network. But the networks those “combined charging standard,” or CCS plugs did work with were not that good.
As of Thursday at 4:30 PM Detroit time, the scene has changed, dramatically.
That’s when General Motors CEO Mary Barra appeared on Twitter Spaces with Tesla’s Elon Musk to announce an agreement that GM will join Ford in adopting Tesla’s North American Charging System (NACS) plug standard starting with GM vehicles built in 2025. Tesla will open 12,000 Superchargers to GM EV drivers starting next year. (GM’s announcement is here.)
Ford announced its deal with Tesla on May 25. Now, the three automakers that currently command about 70% of U.S. EV sales are adopting the Tesla charging system.
The charging standard war in the United States appears to have entered the beginning of its end.
Investors judged it a big win for Tesla that Ford and GM will embrace the Supercharger ecosystem.
As of Thursday’s close, Tesla’s market cap had increased by about $165 billion since the day before the charging alliance with Ford was disclosed. Investors were looking to add another $35 billion to Tesla’s market cap based on pre-market trading Friday. It’s another great day to be Elon Musk.
GM and Ford shares rose as well – though the market caps of the Detroit automakers remain far smaller than Tesla’s. Barra told CNBC GM could save $400 million by allying with Tesla on charging. Not small change.
(The industry and investors would really love a deal to create a global charging standard, but that’s not on the cards yet. Europe has already committed to CCS, Japan uses still another type of plug and a senior Chinese government official said Friday that China should be setting global EV charging standards.)
Shares in rival charging networks, such as ChargePoint and EVgo, sank in early Friday trading. The non-Tesla networks could lose customers, and face extra costs to be compatible with the best-selling EVs in the North American market.
For consumers, the benefits of the Tesla-Ford-GM push to rationalize North American charging fully arrive in 2025, when new GM and Ford EVs will have factory-installed Supercharger compatible connectors. (Starting next year, drivers of GM and Ford EVs can obtain connector adapters to use Superchargers.)
Put another way, if you want an electric Chevy or Ford pickup that can seamlessly get a rapid re-charge at a Tesla Supercharger, wait until 2025. (Here’s a look at the difference between a Tesla plug and a CCS plug.)
The years 2024 and 2025 are critical because that’s when the Detroit automakers plan to launch a wave of next-generation EVs designed to sell at high volume. The muddle over charging standards and charging network quality has been a barrier to wider EV acceptance.
Are there risks for Tesla’s North American market competitors in buying tickets to Elon Musk’s garden? Sure. These deals suggest whatever those risks are, the rewards of removing a consumer pain point and piggybacking on Tesla’s charging investment are greater.
