Analysis-Ford’s electric vehicle charging tie with Tesla ripples through industry

By Abhirup Roy, Hyunjoo Jin and Isla Binnie

SAN FRANCISCO (Reuters) – Ford Motor Co’s decision to allow customers to use Tesla’s electric vehicle charging network has caused repercussions in the industry, raising questions about a national charging standard in the United States as well as the fate of struggling charging startups.

The deal, announced last month, would open more than 12,000 Tesla Superchargers to drivers of Ford vehicles in North America starting in 2024.

The tie-up puts pressure on other companies and the administration of US President Joe Biden to queue up or spend more to improve their games, according to industry executives, investors, bankers and officials. consultants.

“Tesla’s lead in the space and Ford’s join … will force companies that have invested in other technologies to pivot, which will be an expensive proposition,” said Paul Baiocchi, chief ETF strategist at SS&C. ALPS Advisors.

SS&C has invested in charging companies such as ChargePoint Holdings Inc, EVgo Inc and Blink Charging Co.

The deal with Ford gave a boost to Tesla’s more widespread and reliable North American Charging Standard (NACS) and reduced the value of smaller players offering the rival Combined Charging System (CCS). Tesla CEO Elon Musk hopes the deal with Ford, the second-largest seller of electric vehicles in the United States, will help make Tesla’s technology the North American standard.

Now, these players face pressure to upgrade their networks to work with Tesla at a time when many are behind in customer service and lack the funds to make such a commitment.

The Biden administration did not respond to requests for comment, but Transportation Secretary Pete Buttigieg told CNBC after the Ford-Tesla deal that the administration was “not going to pick winners and losers by according to the prevailing standard”. He added that the industry will eventually converge to a single system, but adapters would enable cross-use.

CharIn, a global association promoting CCS, said deals like Tesla-Ford’s “create uncertainty in the industry and lead to barriers to investment.”

The U.S. government previously earmarked $7.5 billion in federal funds to push businesses to adopt CCS as part of Biden’s plan to fight climate change by converting 50% of all new vehicle sales in the United States. United in electric vehicles by 2030.

Retaining EVs has been a weak CCS charging infrastructure that many complain of being inefficient or sometimes unusable, causing potential buyers to fear being stranded on the road with nowhere to recharge.

But installing and maintaining a charging network is capital-intensive, and with electric vehicles accounting for just 6% of new-car sales in the United States last year, it’s hard to make money. money with top-up, industry officials said. Most car manufacturers have not created their own charging networks.


That financial pressure can only intensify if more companies adopt Tesla as the industry standard for billing, pushing more deals like Shell’s $169 million takeover of Volta earlier this year or the acquisition of AMPLY Power by BP at the end of 2021.

“There was already some consolidation happening in the space and now I think it will only accelerate,” said Lazard banker Mohit Kohli.

Efforts by the Biden administration have so far backed the CCS connector favored by automakers including Volkswagen AG, General Motors Co and BMW. Tesla adopted this standard in Europe under pressure from regulators and is gradually opening up part of its American network to vehicles using CCS to potentially benefit from subsidies.

However, complaints about other charging companies’ software bugs or faulty charging hardware only open the door to greater access to Tesla’s standard, industry officials said.

Under its new deal, Ford will distribute Tesla adapters to customers and, starting in 2025, equip future electric vehicles with NACS. It was unclear whether these adapters will be available to customers of other automakers.

Some companies are already considering adopting Tesla’s technology, but the lack of a national standard could cause more headaches, industry officials said.

“We are now likely forced to coexist with two separate billing standards for the foreseeable future,” said Chris Harto, senior policy analyst at Consumer Reports.

FreeWire CEO Arcady Sosinov said his company plans to offer NACS connectors to its fast chargers by mid-2024, while Aptera Motors CEO Chris Anthony said the US government should invest in the Tesla network if it becomes the predominant standard.

“Because of this announcement…there will continue to be a standards war for a decade or more,” Sosinov said.

(Reporting by Abhirup Roy and Hyunjoo Jin in San Francisco; Additional reporting by David Shepardson and Jarrett Renshaw in Washington; Editing by Ben Klayman and Matthew Lewis)

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