Tesla just gave away one of its biggest advantages in the EV race
- Tesla announced on Thursday that it plans to open some of its Supercharger network to Ford.
- Tesla has the largest network of roadside fast chargers in North America.
Tesla plans to open some of its exclusive Supercharger network to Ford owners — a move that could diminish a significant Tesla advantage in the EV race.
The partnership, announced Thursday, will allow Ford EV owners to access about 12,000 Tesla Superchargers across North America starting in the spring of 2024.
Wedbush tech analyst Dan Ives told Insider that it's a "no-brainer move" for Ford, adding that "Tesla holds most of the cards with its Supercharger network."
Tesla has spent over a decade building out more than 20,000 Superchargers in North America, earning it the region's largest network of roadside fast chargers. Moreover, Superchargers are widely regarded as more reliable and easy to use than other networks' chargers. Non-Tesla EV owners rely on a shakier patchwork of public chargers, which can be difficult to find and are plagued by reliability issues.
While most EV owners charge at home, a lack of public chargers has historically posed a hurdle to wider EV adoption as drivers struggle with range anxiety. Over the years, non-Tesla owners have shared their horror stories — from a road trip where a Kia EV owner had to stop 12 times to charge at slow public chargers to a Mustang Mach-E driver who had to stop at four different charging stations, frantically searching for a working one.
What's more, if you ask a Tesla owner why they chose the automaker, it often comes down to the company's charging network. Several Tesla owners told Insider they would only consider buying another automaker's EV if they either had access to Tesla's network or an equally reliable network.
"I couldn't even imagine being with another car company and relying on third-party chargers," Jonathan Baalke, a Model 3 owner in Kentucky who says he drives over 150 miles a day for work, told Insider. "It's hard to have range anxiety when you have access to Tesla's network, but if I was with any other brand's cars, I would definitely have some concerns."
The move may leave some Tesla owners peeved at having to share their beloved chargers with outsiders. Garrett Nelson, vice president and senior equity analyst at the research firm CFRA, expects "dissatisfaction" from "some Tesla owners at the increased traffic at Tesla charging stations."
Musk isn't against evening the playing field. On Thursday, the Tesla CEO said the move will ensure that Ford is on "equal footing" with Tesla.
"We don't want the Tesla Supercharger network to be like a walled garden," Musk said. "We want it to be something that is supportive of electrification and sustainable transport in general."
Before Thursday's announcement, Tesla had already opened some of its chargers to non-Tesla owners in Europe and in some parts of the US. Current Ford electric cars will need a special adapter to connect to Tesla's charging plugs, but Ford's next-generation EVs will come equipped with a Tesla-style port. (Most electric models use one style of port called the Combined Charging Standard; Tesla uses another, which it calls the North American Charging Standard.)
So what's in it for Tesla?
While there's a bit of risk involved — making the Supercharger network less exclusive could steer potential customers toward non-Tesla options, like the Ford Mustang Mach-E SUV — the charging deal also gives Tesla a valuable source of recurring revenue, Mike Austin, a senior research analyst at Guidehouse Insights specializing in EVs, told Insider.
"It's a much simpler business model than building cars," he said. "It generates regular revenue, and you don't have to deal with recalls or tooling or putting up factories."
Musk has indicated in the past that he's not concerned about Tesla's market share. Last month, the billionaire said during Tesla's annual meeting that the carmaker could sell its product for "zero profit" and still dominate the market due to its autonomous technology.