In addition to setting an example for other competitors with price cuts since the beginning of the year, Tesla's superchargers seem to be the most attractive aspect in expanding faster in the market. US carmaker General Motors will therefore adopt Tesla's charging plug standard and, following Ford, gain access to charging on these devices. Tesla along with GM currently account for 70% of all electric vehicles sold in the US market. Transportation Secretary Pete Buttigieg is confident that the EV industry will eventually converge on a unified operation along with the Combined Charging System (CSS) to facilitate all-electric driving. A common North American Charging Standard (NACS) connector would thus simplify consumer adoption of EVs. Tesla will understandably benefit the most from this agreement, as its Supercharger network is the largest in both the US and Canada, with up to 12 thousand charging stations. It also opens the way for other carmakers to incorporate Tesla's common connector into their manufacturing process.
Other companies are hoping that customers might prefer their products over Tesla's due to easier charging and an accessible network. CEO Elon Musk won't be showing preferential treatment, rather focusing on the importance of moving forward in the electric vehicle revolution. GM CEO Mary Barra presented the collaboration as a key part of their strategy to produce millions of high-quality electric vehicles and create an ecosystem where charging with electricity is more attractive than fueling with gasoline, easing the transition of customers away from combustion-engine vehicles.
General Motors' stock performance over the past five years. (Source: Google)
In addition to the deal, General Motors also announced a $500 million investment in an auto assembly plant in Arlington, Texas. It wants to be better prepared to produce the next generation of Chevrolet Tahoe and Suburban internal combustion engine SUVs, which will be more efficient and emissions-compliant compared to past series. Additional funding will go towards the rebuilding of two manufacturing plants in Flint, Michigan, focusing on trucks, to the tune of USD 1 billion. Total investment under the emissions measures set by California and the Environmental Protection Agency (EPA) could exceed $3 billion. GM wants to end production of petrol-powered vehicles by 2035, but until then it will seek to provide customers with a wide range of such vehicles. The GM automaker has had a very successful 2022. The stock's growth is not as strong this year, but with the new deal within Tesla, it has the opportunity to regain growth momentum and get a jump on the electrification of transportation trend.*[1] The stock reacted positively following the news of the collaboration.*
Tesla's stock performance over the past five years. (Source: Google)
* Past performance is no guarantee of future results.
[1] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or on the current economic environment, which may change. Such statements are not guarantees of future performance. They involve risks and other uncertainties that are difficult to predict. Results may differ materially from those expressed or implied by any forward-looking statements.
