Tesla (TSLA.O) shares closed 4% higher on Friday after General Motors (GM.N) joined Ford (F.N) in agreeing to use its electric-vehicle charging network, a big win that analysts said could make Tesla Superchargers an industry standard in the United States.
The rare partnership among three of the biggest U.S. automakers ensures that more than 60% of the country’s EV market can access Tesla’s North American Charging Standard (NACS), which should make it the primary network in the country.
The White House on Friday said electric-vehicle charging stations using Tesla standard plugs would be eligible for billions of dollars in federal subsidies as long as they included the U.S. charging standard connection, CCS, as well.
“Tesla is hoping that CCS adapters will help it meet that requirement to qualify for federal tax dollars,” said Garrett Nelson, senior investment strategist at CFRA Research.
“Any way you slice it, we think Tesla opening up its Supercharger network to competitors is a big negative for third-party charging companies.”
Shares of independent charging companies such as ChargePoint Holdings Inc (CHPT.N), EVgo Inc (EVGO.O) and Blink Charging Co (BLNK.O) closed between 11% and 13% lower.
Wedbush Securities estimated Ford and GM combined could add $3 billion to services EV charging revenue for Tesla over the next few years. The brokerage also raised its price target on the stock to $300, which is nearly 30% above its last close.
Already the world’s most valuable automaker, Elon Musk-led Tesla has added about $190 billion to its market value since announcing the charging tie-up with Ford on May 25.
Tesla’s stock finished higher on Friday, marking the eleventh straight session of gains, its longest winning streak in 2-1/2 years. It was among the most traded stocks across U.S. exchanges during trading hours.
The stock has a forward 12-month price-to-earnings ratio of 60.46, among the highest in the S&P 500 index (.SPX), and far greater than GM’s 5.29 and 7.94 for Ford.
Traders who have sold Tesla shares short have lost about $6.08 billion on a mark-to-market basis during the electric car maker’s current winning streak, according to the latest data from S3 Partners.
GM CEO Mary Barra said on Thursday that “we have a real opportunity here to really drive (the NACS) to be the unified standard for North America, which I think will enable even more mass adoption.”
Shares of both GM and Ford closed up over 1% on Friday.
The tie-ups will put pressure on other companies to upgrade their networks to work with Tesla’s at a time when many lag in customer service and lack the funds to make such a commitment.
Blink Charging welcomes the “opportunity to work with Tesla on interoperability with cables and connections,” a spokesperson said.
“Tesla’s been one step ahead in this game and with other operators trying to play catch up they were already at a disadvantage,” said Danni Hewson of AJ Bell, adding that charging business could become a big growth driver for Tesla.
Greater usage of Tesla Superchargers could, however, create its own problems for the company, said Michael Austin, senior research analyst at Guidehouse.
“There is a risk for Tesla in terms of either making the stations too busy and disappointing Tesla owners or removing that competitive advantage of having exclusive access to the best network,” Austin said.