In today’s edition:
- Tesla’s Supercharger Triumph: GM and Ford embrace Tesla’s charging standard
Market Snapshot
The S&P 500 and Nasdaq Composite indices have reached 14-month peaks, as market participants anticipate a standstill in the Federal Reserve’s rate-hiking policy at the upcoming Federal Open Market Committee (FOMC) meeting, along with monthly inflation data.
Data as of market close 12th June 2023
Source: AlphaScreener
Tesla’s Supercharger Triumph
In a significant development for the electric vehicle (EV) industry, General Motors Co. (GM) has followed Ford Motor Co.’s (F) lead by announcing a partnership with Tesla Inc (TSLA). Both companies agreed to adopt Tesla’s Supercharger network, finally ending the debate over EV charging standards. With 17,740 individual ports in the US, Tesla has the largest EV charging network by a wide margin (see Figure 1 below). Following their deal with Tesla, both Ford and GM will begin equipping their EVs with charging ports suitable for Tesla’s proprietary North American Charging Standard (NACS).
Figure 1: Tesla dominates the EV charging market. Source
Despite their rivalry in the automobile industry, this partnership is a win-win scenario for all parties. It will streamline the EV charging infrastructure in the US and address consumer concerns about access to reliable charging options.
- Ford and GM get access to an improved charging network. Until now, both companies have used the often unreliable Combined Charging System (CCS). In contrast, Tesla’s NACS has a larger capacity and is cheaper to make.
- Tesla strengthens its position in the EV market by adding millions of new customers to its network. According to Elon Musk, Tesla’s charging network had profitability of roughly 10% last year. Adding more customers will boost revenue.
- EV consumers gain access to more charging stations. The availability of nearby charging options has been the greatest obstacle to EV adoption in the US. Adopting the NACS will mitigate many of the charging issues faced by consumers.
However, this deal has severe implications for other EV charging companies. Despite increasing revenues, competitors such as EVgo Inc. (EVGO), ChargePoint Holdings Inc. (CHPT), and Blink Charging Co. (BLNK) have been struggling due to a lack of profitability. Following the recent announcements, their stock prices fell sharply. These operators now face the challenge of finding new ways to remain competitive.
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This article is meant to be informative and not to be taken as an investment advice, and may contain certain “forward-looking statements,” which may be identified by the use of such words as “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “potential” and other similar terms. Examples of forward-looking statements include, without limitation, estimates with respect to financial condition, market developments, and the success or lack of success of particular investments (and may include such words as “crash” or “collapse”). All are subject to various factors, including, without limitation, general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors that could cause actual results to differ materially from projected results.
This video is meant to be informative and not to be taken as an investment advice and may contain certain “forward-looking statements” which may be identified by the use of such words as “believe”, “expect”, “anticipate”, “should”, “planned”, “estimated”, “potential” and other similar terms. Examples of forward-looking statements include, without limitation, estimates with respect to financial condition, market developments, and the success of or lack of success of particular investments (and may include such words as “crash” or “collapse”.) All are subject to various factors, including, without limitation, general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors that could cause actual results to differ materially from projected results.