:Tesla shares were up 5 per cent on Friday after General Motors joined Ford in agreeing to use its electric-vehicle charging network, a big win that analysts said could make Tesla Superchargers an industry standard in the United States.
The rare partnership among three of the biggest U.S. automakers ensures that more than 60 per cent of the country’s EV market can access Tesla’s North American Charging Standard (NACS), which should make it the primary network in the country.
The White House on Friday said electric-vehicle charging stations using Tesla standard plugs would be eligible for billions of dollars in federal subsidies as long as they included the U.S. charging standard connection, CCS, as well.
“Tesla is hoping that CCS adapters will help it meet that requirement to qualify for federal tax dollars,” said Garrett Nelson, senior investment strategist at CFRA Research.
“Any way you slice it, we think Tesla opening up its Supercharger network to competitors is a big negative for third-party charging companies.”
Shares of independent charging companies such as ChargePoint Holdings Inc, EVgo Inc and Blink Charging Co fell between 10 per cent and 13.6 per cent.
Already the world’s most valuable automaker, Elon Musk-led Tesla has added more than $200 billion to its market value since announcing the charging tie-up with Ford on May 25.
Should the stock finish higher Friday, it would mark the eleventh straight session of gains, its longest winning streak in 2-1/2 years. It was among the most traded stocks across U.S. exchanges.
The stock has a forward 12-month price-to-earnings ratio of 60.46, among the highest in the S&P 500 index, and far greater than GM’s 5.29 and 7.94 for Ford.
GM CEO Mary Barra said on Thursday that “we have a real opportunity here to really drive (the NACS) to be the unified standard for North America, which I think will enable even more mass adoption.”
Shares of GM and Ford rose about 2 per cent on Friday.
CHARGING RACE
The tie-ups will put pressure on other companies to upgrade their networks to work with Tesla’s at a time when many lag in customer service and lack the funds to make such a commitment.
Blink Charging welcomes the “opportunity to work with Tesla on interoperability with cables and connections,” a spokesperson said.
“Tesla’s been one step ahead in this game and with other operators trying to play catch up they were already at a disadvantage,” said Danni Hewson of AJ Bell, adding that charging business could become a big growth driver for Tesla.
Wedbush Securities estimated Ford and GM combined could add $3 billion to services EV charging revenue for Tesla over the next few years. The brokerage also raised its price target on the stock to $300, which is nearly 30 per cent above its last close.
Greater usage of Tesla Superchargers could, however, create its own problems for the company, said Michael Austin, senior research analyst at Guidehouse.
“There is a risk for Tesla in terms of either making the stations too busy and disappointing Tesla owners or removing that competitive advantage of having exclusive access to the best network,” Austin said.
(Additional reporting by Chavi Mehta in Bengaluru; Editing by Shounak Dasgupta and Maju Samuel)
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