Tesla Shares Gain As GM Joins Ford In Deal For Tesla Superchargers
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Tesla shares closed trading on Friday with an over 4% gain. The gain came after General Motors agreed to use Tesla’s electric-vehicle charging network. The move is a major win for the company, with analysts saying that it could result in Tesla Superchargers becoming an industry standard across the United States.
Tesla shares jump after GM deal
The partnership between Tesla, GM, and Ford is a rare one. The three are the largest automakers in the US, and the GM deal will now ensure that over 60% of the US EV market can access Tesla’s North American Charging Standard (NACS).
On Friday, the White House released a statement saying that EV charging stations using the standard plug offered by Tesla were eligible for billions of dollars worth of federal subsidies if they included the US charging standard connection.
Analysts believe that Tesla is hopeful of meeting the requirement and qualifying for the subsidies. However, analysts have also criticized the move saying that the decision by Tesla to make its Supercharge network available to competitors triggered a negative effect for the third-party charging companies.
According to Wedbush Securities, Ford and GM could add another $3 billion to the EV charging revenue for Tesla in the next few years. The broker also increased the price target on Tesla’s stock to $300.
Tesla is currently the most valuable automaker globally. The company has expanded its market value by around $190 billion since announcing a deal with Ford for its charging stations on May 25.
Tesla’s stock gains mark an eleventh consecutive session of gains and the largest winning streak in two and a half years. Tesla was among the most traded stock across US exchanges during trading hours on Friday. The stock currently has a 12-month price-to-earnings ratio of 60.46, which is the highest in the S&P 500 index.
The race around EV charging
The deals secured by GM and Ford for Tesla charging stations will put pressure on other companies to also make a similar move and work with Tesla. However, this pressure comes at a time when most automakers are dealing with a lag in customer services and a lack of funds to make such commitments.
A spokesperson from Blink Charging said that the company was welcoming an opportunity to work with Tesla to boost interoperability with connections and cables. An executive from AJ Bell has also opined that Tesla has always been a step ahead in the EV industry, adding that the charging business will be a major driver of growth for the company.
If there is increased use of Tesla Supercharges, it could create problems for the company, according to one of the research analysts. The analyst noted that there was a risk for Tesla if these stations became too busy and disappointed those who own Tesla vehicles. It would also remove the competitive advantage that people have in gaining exclusive access to a leading network.
