Tesla’s charging deals with GM and Ford will set the U.S. standard and bring in $3 billion annually by 2030, analyst says

The Elon Musk-led electric-vehicle company announced the latest deal Thursday in a Twitter Spaces audio chat alongside GM Chief Executive Officer Mary Barra. It was Barra’s first appearance on the social media site since Musk completed his purchase of Twitter late last year. Ford CEO Jim Farley announced its deal with Tesla in a similar arrangement in May.

The deals, which now make Tesla’s charging model the standard in the US among the largest American automakers, will pressure competitors to ditch the primary competing standard, known as CCS.

“Other brands will be forced to join this consortium, effectively establishing Tesla’s ‘North American Charging Standard’ as the preferred approach for EV charging — at least in the United States,” Piper Sandler analyst Alex Potter said in a research note Friday.

Details on revenue were not released by the companies, but Piper Sandler estimates that Tesla could add upwards of $3 billion in charging revenue from non-Tesla owners alone by 2030 and $5.4 billion by 2032. 

Shares of Tesla were up 5.3% at 2 p.m. in New York on Friday. GM traded up 1.4%. 

That charging windfall may not seem huge for Tesla, which already boasts revenue in excess of $80 billion a year. It also won’t be as lucrative for Tesla as the $5.8 billion in revenue it brought in from selling regulatory credits over the past five years, but it will still be additive for the company.

Tesla’s US competitors are also all trying to catch up in the EV race. Bringing in more revenue can only add to the company’s momentum at a time when GM and Ford both say their EV programs aren’t profitable and won’t be for at least another year.

Competing charging companies fell on the news of Tesla’s deal with GM. EVgo Inc., which had recently joined a partnership with GM to build more charging stations, fell 14% at 2 p.m. in New York. ChargePoint Holdings Inc. declined 13%.

These companies may now be directly competing with Tesla, which has about 20,000 fast chargers in 1,800 locations. Currently, GM drivers have access to 13,000 DC fast chargers in North America. Ford and GM owners will gain access to 12,000 of Tesla’s Superchargers as part of the deal.

Tesla may get more business initially because the network is more reliable, said Gil Tal, director of the Electric Vehicle Research Center at the University of California, Davis. A recent survey from JD Power found Tesla’s charging network most reliable among competitors.

“Tesla has made a huge investment in its charging network,” Tal said in an interview. “They have a good chance of making a business out of this. The main thing Ford and GM see out of this is not about the number of chargers, but the dependability of them.”