6 months ago • 2 mins
What’s going on here?
General Motors (GM) became the latest carmaker to buddy up with Tesla last week.
What does this mean?
Ford announced only a few weeks ago that it was cozying up to Tesla and accessing the OG EV maker’s sprawling charging network. And now GM’s jumping on the electrified bandwagon, signing a similar deal and planning to adapt its cars for Tesla’s chargers. That’s some trio: Ford, GM, and Tesla are the three biggest US players in the space, making up around 70% of the country’s EV sales. Tesla, then, has effectively cemented itself as the industry standard for electric charging, which could convince more carmakers to join the club. So if any petrol heads have been put off by sparse compatible charging spots, this all-star network could be enough to make them see the LED light.
Why should I care?
The bigger picture: Lucky for some.
Tesla will be thanking its pricey decision to deploy fast-charging stations across North America, while rivals left that to third-party companies. See, analysts reckon the Ford and GM deals alone could buoy Tesla’s revenue up $3 billion over the next few years. And while some pundits worry that Tesla’s charging stations could get backed up, the firm can always build more. Just spare a thought for companies that make their bread and butter from charging tech: ChargePoint Holdings and Evgo’s shares dropped after the news.
For markets: Shh, whisper it.
Investing guru Cathie Wood says Tesla’s self-driving and robotaxi tech makes the firm today's biggest AI play. Thing is, that excitement might already be priced into the stock: Tesla’s up 130% this year, and its price-to-earnings ratio – a key valuation metric – is more than seven times higher than the likes of Ford, and even sits around 40% higher than AI darling Nvidia. So sure, Tesla might change the way the world drives, but it’s certainly not your under-the-radar secret trade.
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