GM CEO Mary Barra claims that the Tesla charging agreement will save the company up to $400 million
DETROIT – General Motors CEO, Mary Barra stated that a charging agreement signed Thursday with Tesla will save the automaker up to $400 million in planned investments in EV charging infrastructure in the United States and Canada.
In October 2021, GM announced plans to invest $750 million in electric vehicle charging infrastructure in both countries. According to GM, this includes home, office, and public charging across the United States and Canada.
We think we can save up to $400 million in the original three-quarters of a billion dollars that we allocated to this because we’ve been able to do it faster and more effectively,” Barra said Thursday on CNBC’s “Fast Money.” “We’re really looking for ways to be more efficient.
In answer to a query regarding licensing other Tesla technologies, Barra stated that the Detroit carmaker is “going to always look for ways to be more capital-efficient” and that “if there are other opportunities to partner, you know, we’re going to be very open to them.
Beginning next year, GM EV drivers will be able to use an adapter to connect to more than 12,000 Tesla fast chargers. It will also entail GM using Tesla’s charging port rather than an industry standard.
The GM agreement comes on the heels of Ford Motor Company’s announcement of a similar agreement with Elon Musk’s Tesla. The CEOs of both Detroit automakers announced the deals on Twitter alongside Musk.
When the Tesla-Ford deal was announced last month, Wall Street experts welcomed it as a “win-win” situation.
GM and Tesla stocks were both up more than 3% in extended trading on Thursday.
Snowball effect
From a customer standpoint, the agreements with the Detroit automakers appear to be a triumph for Tesla, which spent substantially to spread its distinctive fast-charging stations across North America at a time when most other automakers delegated charging to third parties.
This is pretty significant,” said Consumer Reports senior policy analyst Chris Harto. “I could see this as a snowball effect where more and more automakers jump on board and shift to the Tesla standard.
The partnerships are a bet by GM and Ford that the benefits of providing their customers with access to Tesla’s massive rapid charging network outweigh the risks that their clients will like the things they see and pick Tesla for their next purchase.
The Tesla-GM-Ford alliance puts stress on other automakers as well as independent charging network operators who have adopted the CCS standard. A shift to Tesla’s standard in the United States might make it impossible for rival charging station manufacturers who are already setting up shop in the country to provide CCS-compliant equipment.
It does make it much more likely that NACS will win out in North America over CCS,” Morningstar Research’s David Whiston said, referring to Tesla’s North American Charging Standard. Other charging providers, he continued, may continue to use the CCS standard and rely on adapters to support Tesla, Ford, and GM vehicles.
In after-hours trading on Thursday, shares of charging providers ChargePoint and EVgo were both down more than 4%.
Beginning in 2025, GM plans to equip EVs with connectors based on the Tesla North American Charging Standard design. Current GM EV owners will be able to utilise 12,000 Tesla fast chargers throughout North America starting next year, and adapters will be available.