General Motors announced on Thursday that it will start using Tesla technology to charge its electric vehicles, and will begin selling models using the pioneering Tesla plugs. This follows a comparable agreement by Ford two weeks ago, and is likely to make Tesla’s plugs an industry standard, posing a threat to companies racing to build similar networks as electric vehicle sales soar. The agreement means that Ford and G.M. vehicle owners will be able to use Tesla chargers, which are known to be reliable and often the only ones available in many places. The move will almost double access to chargers for G.M. customers. However, it may raise concerns that Tesla, which dominates electric vehicle sales, could overwhelm competitors in the fast-growing charging business.
Although G.M. will gain access to more chargers, Tesla will make money from selling energy to owners of models made by other carmakers. Tesla has charged owners of these vehicles higher rates than owners of its own cars. Additionally, by adopting Tesla’s charging standard, Ford and G.M. risk becoming dependent on their most formidable competitor. Neither of these carmakers sells anywhere near as many electric cars as Tesla, and neither operates a charging network. The agreement also has risks for Tesla, as the popularity of its cars has created congestion at its charging stations in some cities and highways. Tesla owners may become irritated that they will now have to queue with cars made by Ford and G.M.
The competition between Tesla’s charging plugs and the ones used by Ford, G.M. and other automakers could have long-lasting implications for the millions of people who are expected to switch to electric vehicles in the coming years. Tesla sells cars with a plug known as the North American Charging Standard, whereas Ford, G.M. and most other carmakers have sold cars with plugs using the Combined Charging System plug, and the two are not compatible. Investors welcomed the deal, with the share prices of both Tesla and G.M. up by 3% in extended trading on Thursday.
Starting from early 2024, owners of Ford and G.M. electric vehicles will be able to buy adapters to connect to Tesla fast chargers, and in 2025, both companies plan to sell vehicles designed to use Tesla’s North American plug. By partnering with an archrival, Ford and G.M. have acknowledged the necessity of Tesla’s network to sell electric vehicles. Dependable, widespread public charging stations are a key driver to scaling the adoption of electric vehicles, according to Jim Farley, the CEO of Ford, when the company announced its agreement with Tesla last month.
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