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Founded in 1993 by brothers Tom and David Gardner, The Motley Fool is helping millions of people achieve monetary freedom through our website, podcasts, books, a newspaper column, a radio show and premium investment services.
Equity markets behaved on Friday, ending the week with gains forged for major market benchmarks. The Nasdaq Composite (^IXIC 0. 01%) and the S
Index
Daily change
Daily change
Dow
1,00 %
329
S
1,30%
54
NASDAQ
2,19%
278
Aside from the AI-related hype, big news has come from the EV box. Tesla (TSLA 1. 54%) has made a big deal with rival automaker Ford Motor Company (F-0. 48%), and while Ford’s consumer benefits are obviously unclear, it’s not entirely clear whether the gains Tesla will make from the deal will outweigh the potential visitor losses from its notoriously unwavering consumers.
Ford and Tesla have announced that Ford EV consumers will have access to the Tesla Supercharger network starting in early 2024. Through this agreement, Ford electric vehicle owners will benefit from more than 12,000 additional charging features for their cars and trucks, in addition to more than 10,000 quick services. Chargers that Ford already claims as part of its BlueOval Charge network.
Investors on both sides of the deal celebrated the news. Ford shares rose more than 6% on Friday. Tesla shares rose only about 5%, representing a much larger accumulation in market capitalization due to Tesla’s larger size.
Clearly, the deal is a boon to Ford customers. Range anxiety is a major barrier for many prospective EV buyers, especially those who have to drive cars over longer distances. Despite the length of Ford’s network and the proliferation of third-party charging company vehicles, EV drivers have provided combined reviews on the reliability of the charging features offered to them. The Supercharger network, on the other hand, has been a critical component of Tesla customers’ confidence in driving their cars.
Some observers have pointed out that Tesla has said its overall corporate goal is to drive the transition to a sustainable future, in part through the electrification of the transportation industry. In that sense, and forgetting for a moment any fiduciary duty to shareholders, Tesla’s resolution makes perfect sense.
From a more monetary standpoint, it’s not transparent what the terms of the Ford-Tesla deal will be. According to Ford’s press release, owners of the Mustang Mach-E, F-150 Lightning and E-Transit will have to switch lights and pay for access to the Supercharger, as well as download an adapter and integrate their vehicle’s software into Tesla’s network. Starting in 2025, Ford will start using Tesla-compatible connectors, rendering adapters useless.
Whether Tesla gets a financial boost by opening supercharger stations at Ford, the company is taking a big risk. One of the problems of promoting Tesla cars is the great access to superchargers. — or worse, taking all the seats in one position — might annoy them so far, they haven’t had to share charging resources with homeowners of other EV brands.
Of course, Tesla has been building visitor loyalty for years. It won’t go away overnight. But the more steps the auto company takes to voluntarily give up its core competitive advantages, the more shareholders worry that the company and its control team won’t fully align their monetary interests with theirs.
Dan Caplinger has no position on the above. The Motley Fool has positions and recommends Tesla. The Motley Fool has a disclosure policy.
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