An unprecedented and completely unthinkable thing just happened. Tesla, Inc. (TSLA) CEO Elon Musk has agreed to let Ford Motor Company (NYSE:F) begin to utilize Tesla’s vast electric vehicle (“EV”) Supercharger network. I don’t think I’ve ever seen this level of generosity between competitors in my lifetime. According to Seeking Alpha News:
“Ford Motor Company (F) announced that it struck a deal with Tesla (TSLA) to gain access for its customers to more than 12K Tesla Superchargers across the U.S. and Canada. The arrangement will double the number of fast-chargers available to Ford electric vehicle customers starting Spring 2024.
A Tesla-developed adapter will provide Ford F-150 Lightning, Mustang Mach-E and E-Transit vehicles fitted with the Combined Charging System port access to Tesla’s V3 Superchargers. Notably, Ford (F) said it will start equipping future electric vehicles with the NACS charge port in 2025 to remove the need for an adapter for direct access to Tesla Superchargers.
“The Tesla Supercharger network has excellent reliability and the NACS plug is smaller and lighter. Overall, this provides a superior experience for customers,” noted a Ford exec Marin Gjaja.
Earlier in the year, the White House announced that Tesla (TSLA) would be opening up parts of its Supercharger network to other auto manufacturers.
In addition to the Tesla (TSLA) arrangement, Ford dealers (F) are adding about 1.8K public-facing fast-chargers and locations to the BlueOval Charge Network by early 2024.”
Yes, it is true. Tesla had already agreed to open up parts of its supercharger network to other automakers earlier in the year. Yet, this was something special. Tesla CEO Elon Musk and Ford CEO Farley actually had a Twitter Spaces event yesterday to announce the partnership. I must say, it was very interesting. The following are my takeaways from the Twitter Space event.
Top Three Musk/Farley Space event Takeaways
This is going to be huge for Ford
Ford CEO Farley could not stop thanking Elon for making this gesture. Farley stated explicitly that this was going to be a huge problem solver for Ford’s next generation EV products, referred to as “Gen 2” by Ford. Ford plans to have an updated version of the Ford F150 Lightning and a 3 row 7-seat passenger vehicle Farley referred to as a “bullet train” equipped with the NACS Tesla supercharger plug. Tesla’s NACS supercharger plug has “Excellent reliability, is smaller and lighter, and provides a superior experience for customers,” noted a Ford exec Marin Gjaja.
Furthermore, this solves Ford’s electrification issue in a turnkey manner. Farley said more than once what a hard time Ford was having solving the issue. Farley had high praise for Elon. Farley stroked Musk’s ego like a seasoned pro – and Elon was eating it up, I might add. One of my title choices was going to be “Ford: Farley Charmed the Plugs Off Of Elon.” Ha! That leads me to my next point, Elon really likes Farley and Ford. Here is why.
Musk has a soft spot for Farley and Ford
Musk had stated in previous interviews that he has a special respect and affinity for Ford. This is due to the fact Ford did not accept a bailout in 2009 by the government, like General Motors Company (GM) and Chrysler did. If you didn’t know by now, Elon has a conservative, independent bent to him. That’s why he built his new facilities in Texas where there is less government interference than California.
As far as Farley goes, you could tell Elon was eating up all the high praise Farley was dishing out. It’s a match made in heaven, I thought to myself. You could tell by the back and forth that the two men had a great affection and respect for each other. That leads me to my final and most important takeaway, this is only the beginning.
Only the tip of the iceberg
During the Twitter Space event, Farley mentioned how hard it was getting the electrification software to work efficiently and properly. This prompted Elon to agree. Then Musk stated that Tesla had many of the same issues as they worked through the process as well. Then, Musk stated he would work with his software team to see about “open-sourcing” the code so that Ford could use it. I thought that was incredible.
Musk didn’t stop there, either. Farley mentioned the challenges of refining the lithium raw materials for the batteries and asked how it was going at Tesla’s Corpus Christi plant. Musk then said they were definitely working through issues and would partner up on solving those issues as well.
I got a “big brother” type vibe from Musk towards Farley. You could tell he genuinely wants Ford and Farley to succeed. I walked away, thinking Musk might even offer to buy Ford out. Which brings me to another major point. Ford’s “gen 2” EV line up may mesh well with Tesla’s EV line up.
Ford’s next generation EV lineup meshes well with Tesla’s lineup
Ford’s next generation EV lineup is extremely focused. They do not want to complete in the “2 row” 5 seat sedan segment, which is Tesla’s forte. Ford’s next generation vehicles will be in the truck and SUV segment. I see this as complementing well with Tesla’s vehicles offerings. What’s more, Ford has a huge segment of the business vehicle market now, which they refer to as Ford Pro. The electrification of the trucks and vans used by businesses will be a big part of Ford’s EV push. I can see Musk eyeing this as another jewel he wouldn’t mind adding to his crown. Now let me wrap this piece up.
The Wrap-Up
I see Ford Motor Company teaming up with Tesla, Inc. as a match made in heaven. Tesla will definitely benefit from the relationship. Nevertheless, Ford has basically won the “proverbial” lottery, so to speak. Having access to Tesla’s Supercharger network, solving the plug and electrification riddle in one fell swoop, having access to the Tesla’s lessons learned knowledge base as well as the source code, is incalculable if you ask me.
I see a very long and prosperous partnership between Ford and Tesla, Inc. blooming before my very eyes. I actually just doubled my Ford Motor Company stock position. The icing on the cake is the fact Ford pays a dividend, which currently yields 5%.
Seeking Alpha Ford Dividend Summary
Seeking Alpha
So you get paid to watch Ford flourish into an EV power house over the next several years. Not a bad deal.
I was asked by Seeking Alpha to give my thoughts on Ford’s recent Market Day presentation, where they detailed their future plans for the company as well. You can listen to it here. I walked away from the presentation with my bullishness bolstered. I was planning on doubling my position after that already. The breaking news that Ford Motor Company is teaming up with Tesla, Inc. was just the cherry on top for me.
Those are my thoughts on the matter, I look forward to reading yours. Hope everyone has a great Memorial Day weekend!
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