General Motors and Ford Motor are willing to cooperate. Will Tesla dominate North America's charging stations and sweep the United States with electric cars?

After Ford Motor, another veteran car giant, General Motors, announced that its next generation of electric vehicles will use Tesla's charging standard NACS, and Tesla promised to integrate its charging technology into General Motors and Ford Motor vehicles.

Why do Ford Motor and General Motors join forces with Tesla, which has long been seen as a nemesis of traditional car companies? What does this mean for the North American electric vehicle industry?

If you can't beat them, join them?

Tesla's Supercharger uses a special plug design, the North American Charging Standard (NACS), which is only applicable to Tesla electric vehicles. In contrast, most other electric vehicle charging stations in the United States use a public plug standard called the Combined Charging System (CCS).

Currently, Tesla electric vehicles can also be charged with CCS through an adapter, but other brands of electric vehicles, including Ford Motor and General Motors, cannot be charged with NACS.

It is worth mentioning that CCS has a much worse reputation than NACS.

In a study last year, researchers at the University of California, Berkeley examined 675 CCS fast charging stations in the San Francisco Bay Area and found that nearly a quarter of them were unusable. Data and analytics provider JD Power found in a study in August 2022 that similar problems have occurred with CCS charging stations in other parts of the United States, and it also found that Tesla's charging network is more reliable.

Initially, in order to overcome customers' concerns about highway charging, Tesla established its own Supercharger network and quickly expanded its coverage and reliability. Since then, the charging network has become one of the key factors for Tesla's success in the United States.

In addition, Tesla's NACS plug is smaller and lighter than CCS, making it more user-friendly for older or less mobile drivers.

This means that Tesla owners can enjoy rich and stable charging resources, while non-Tesla electric vehicle owners are forced to use chaotic and often faulty charging equipment.

For Ford Motor and General Motors, perhaps customers will have a better test drive experience, but without a reliable charging network, the two giants will always fall short in front of Tesla.

Therefore, one option for them to win customers' favor is to invest heavily in building their own charging network.

General Motors announced in 2021 that it plans to invest $750 million to improve electric vehicle charging infrastructure in the United States and Canada. But in November last year, Tesla opened up the NACS standard, released technical specifications, and invited charging network operators and other car manufacturers to use its plug design. For other electric vehicle manufacturers, a shortcut has emerged. They can use Tesla's technology to avoid investing heavily.

General Motors CEO Mary Barra said in an interview with CNBC on Thursday: "We believe that we can save as much as $400 million from the $750 million budget initially allocated to the project because we can do it faster and more efficiently."

For Ford Motor CEO Jim Farley, these deals also mark a new era of cooperation between automakers that goes beyond long-standing parts partnerships.

Farley said at the Bernstein conference on May 31: "We have collaborated with other automakers on transmissions and engines." Now, cooperation will be more focused on technology, which I think is one of the most interesting new dynamics."

The biggest winner is Tesla

It is certain that this will be a win-win situation, but the biggest winner may still be Tesla.

First, Tesla will definitely receive additional revenue from Ford Motor and General Electric vehicle owners, and its charging network will be more fully utilized.

Second, the fact that charging technology is being used by traditional competitors means that their technology has been recognized by their peers, which is important for Tesla, which has long been seen as an enemy by traditional manufacturers.

Tesla can also receive public electric vehicle charging subsidies passed last year through the bipartisan infrastructure law.

It is worth mentioning that the White House said on Friday that charging stations using the NACS plug standard will be eligible for billions of dollars in federal subsidies as long as they also adopt the CCS charging standard.

The joining of the two giants, General Motors and Ford Motor, to Tesla's charging network paves the way for a unified and open US electric vehicle charging standard.

Although there is still a long way to go to achieve standardization, the direction of industry development is already clear, and at least electric vehicle owners don't have to worry so much about charging.

However, this does not mean that Tesla will achieve a monopoly on the US charging market, even if all automakers eventually adopt the NACS standard.

Tesla has decided to publicly release the NACS standard, which means that competitors' charging network operators can also freely adopt chargers with NACS plugs, and given their advantages, they will almost certainly do so.

ABB, the leader in commercial electric vehicle chargers and a Swiss electrical equipment giant, said on Friday that it will soon offer charging stations designed with NACS plugs.