. Ford's Tesla Deal Sets Industry Standard - 06 June 2023

Ford’s Tesla Deal Sets Industry Standard – 06 June 2023

Ford’s Tesla Deal Sets Industry Standard – 06 June 2023

06 Jun 2023

Ford’s deal with Tesla raises the bar and begins regulatory negotiations

The recent decision of Ford Motor Co. to give its customers access to Tesla’s electric charging network has made significant waves in the industry. The decision sparked debate about the need for standardized freight infrastructure across the United States and called into question the future of struggling freight companies.

The deal, announced last month, outlined plans to give North American Ford drivers access to more than 12,000 Tesla superchargers starting in 2024. Under the deal, Ford will distribute Tesla adapters to customers and equip future electric cars with NACS starting in 2025. It was not clear whether these adapters will be available for customers from other car manufacturers.

Industry officials, investors, bankers, and analysts say the deal will pressure other companies and President Joe Biden’s administration to fall in line or spend more money to up their games.

“Tesla’s leadership in the space and the purchase of Ford … will require companies invested in other technologies to pivot, which is an expensive proposition.

The agreement with Ford gave a big boost to Tesla’s popular and reliable North American Charging Standard (NACS) and hit smaller players who used a competing combined charging system. Elon Musk, CEO of Tesla, hopes that the partnership with Ford, the second-largest seller of electric cars in the United States, will help make Tesla’s technology the norm in North America.

The Biden administration has yet to comment, but Transportation Secretary Pete told CNBC after the Ford-Tesla deal that the administration is “not picking winners and losers based on what standards apply.” He added that the industry would eventually converge on a single system, but adapters would allow cross-use.

The US government previously allocated $7.5 billion in federal funds to encourage companies to adopt CCS as part of Biden’s plan to combat climate change by making 50% of all new US vehicles electric by 2030.

Tesla adopted the CCS standard in Europe under pressure from regulators and is gradually opening parts of its US grid to vehicles using CCS to receive subsidies.

However, limited CCS charging infrastructure has slowed the adoption of electric cars. There have been many complaints pointing to the inefficiency and occasional breakdowns of the CCS system. This has caused potential buyers to worry that they will be stuck on the road with nowhere to charge their electric cars.

Some companies are already planning to adopt Tesla’s technology, but the lack of a national standard could create more headaches, industry officials said.

“Now we’re probably locked into having two separate charging standards side by side for the foreseeable future,” said analysts at Consumer Reports.

Shares of F and TSLA are down 0.40% and 0.18% in premarket trading on Tuesday.