General Motors is embracing Tesla’s EV charging system, cheers from Wall Street

June 8 (Reuters) – General Motors (GM.N) will join Ford Company (FN) in adopting the Tesla Charging Plug (TSLA.O) standard in North America and giving buyers of GM’s electric vehicles access to the Tesla Supercharger network under a announced agreement on Thursday.

GM’s move, which follows a similar decision by Ford to adopt Tesla’s charging standard, means that three of the largest electric vehicle vendors in the North American market have now agreed to a standard for charging devices. The agreement was announced by GM CEO Mary Barra and Tesla chief Elon Musk at a Twitter Spaces event.

Investors applauded the deal, and the prospect of a single standard for shipping devices for the North American market. Shares of General Motors rose more than 4% after shares of Bell and Tesla rose 4%.

An alliance between the three leading competing electric vehicle manufacturers in the United States has major implications for business and public policy.

The Biden administration has made adoption of the competing Combined Charging System (CCS) standard a condition for companies to be eligible for billions of dollars in federal subsidies for new charging stations on about 7,500 miles (12,070 km) of the nation’s busiest roads. The alliance between Tesla, Ford and General Motors defies the direction of the White House.

But Transportation Secretary Pete Buttigieg told CNBC in May after the Ford-Tesla deal that the industry would eventually converge on a single system but the converters would allow cross-use.

Tesla, General Motors, and Ford together account for about 70% of current electric vehicle sales in the United States. Industry executives see the different EV charging connectors as a barrier to broader consumer adoption of EVs.

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“I think this would be a fundamentally great thing for the advancement of electric vehicles,” Musk said during a Twitter Spaces conversation with Barra.

“I think everything has improved a bit,” Parra said.

Barra told CNBC in an interview Thursday that GM could save $400 million from the agreement.

‘snowball effect’

From a consumer standpoint, the deals with the Detroit automakers look like a win for Tesla, which has invested heavily to roll out premium fast-charging stations across North America when most other automakers have delegated charging to third parties.

Tesla Superchargers account for about 60% of all fast chargers in the United States and Canada, according to data from the US Department of Energy.

“This is pretty huge,” said Chris Harto, senior policy analyst at Consumer Reports. “I could see this kind of snowball effect of more and more automakers jumping on board and shifting toward the Tesla standard.”

For GM and Ford, the deals are a bet that the benefits of giving their customers access to Tesla’s extensive fast-charging network outweigh the risks that their customers will love what they see and choose a Tesla for their next purchase.

The alliance between Tesla, GM and Ford is putting pressure on other automakers and independent charging network operators who have adopted the CCS standard. The transition to the Tesla standard could be difficult for competing charging station manufacturers who are already setting up shop in the US making CCS-compliant equipment.

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“It makes it more likely that NACS in North America will beat CCS,” Morningstar Research’s David Weston said, referring to Tesla’s North American charging standard. He added that other charging providers could still use the CCS standard and rely on the adapters to service Tesla, Ford and General Motors vehicles.

Shares of charging companies ChargePoint (CHPT.N) and EVgo (EVGO.O) fell more than 4% in after-hours trading Thursday.

GM said it will supply electric vehicles with connectors based on the Tesla North American Charging Standard design starting in 2025. Next year, existing owners of GM EVs will be able to use 12,000 Tesla fast chargers in North America, and adapters will be provided.

Musk said Tesla is “not going to do anything to favor Teslas” as more competing brands access the Supercharger network. “It will be a level playing field… The most important thing is that we advance the electric vehicle revolution.”

Ford CEO Jim Farley had a similar discussion with Musk on Twitter last month announcing that the No. 2 American automaker had reached an agreement with Tesla to allow electric vehicle owners access to more than 12,000 Tesla Superchargers in North America in early 2024.

Reporting by David Shepherdson in Washington and Joseph White in Detroit Additional reporting by Hyun Joo-jin and Apirup Roy in San Francisco Kannaki Deka and Nikit Nishant in Bengaluru and Garrett Renshaw in Philadelphia Editing by Peter Henderson, Sayantani Ghosh and Matthew Lewis

Our standards: Thomson Reuters Trust Principles.

Joseph White

Thomson Reuters

Joe White is the global automotive correspondent for Reuters, based in Detroit. Joe covers a wide range of automotive and transportation industry topics, and writes The Auto File, a thrice-weekly newsletter about the global auto industry. Joe joined Reuters in January 2015 as Transportation Editor leading coverage of Planes, Trains and Automobiles, later becoming Global Automotive Editor. He previously served as the Wall Street Journal’s Global Automotive Editor, where he oversaw coverage of the auto industry and ran the Detroit bureau. Joe co-authored (with Paul Ingracia) The Comeback: The Fall and Rise of the American Auto Industry, and he and Paul shared the Pulitzer Prize for Cadence Reporting in 1993.

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