Tesla shares they shot up 4.1% this Friday in view of the expectations that its electric vehicle charging system becomes an industry standard after General Motors joined rival Ford in agreeing to use Tesla’s network of superchargers.
The automaker led by Elon Musk he went to his 11th straight earnings sessionwhich marked his longest winning streak in two and a half years. Tesla was also among the most traded stocks on US stock exchanges.
Tesla, already the world’s most valuable automaker, threatened in the day to increase its market capitalization by more than 30,000 million dollars, up to about 780,000 million.
Shares of General Motors, whose market capitalization is much smaller at $49.8 billion but which sells millions more vehicles a year, rose 1.1%.
The unusual partnership between three of America’s largest automakers ensures that nearly 70% of the country’s electric vehicle market will have access to Tesla’s North American Charging Standard (NACS).
This will put pressure on other companies to upgrade their networks to work with Tesla’s, at a time when many of them lag behind in customer service and lack the funds to make such a commitment.
Shares of charging companies including ChargePoint Holdings Inc, EVgo Inc and Blink Charging Co sank between 3% and 10%.
“It’s a huge boost for Tesla’s charging business,” said Chris Harto, a senior policy analyst for Consumer Reports. “They would like to establish themselves as the number one charging network in the country. It could definitely become a great profit center for them in the future.”
Wedbush Securities estimates that Ford and GM combined could add $3 billion to Tesla’s EV charging service revenue in the coming years. The brokerage also raised its price target on Tesla shares to $300, nearly 30% above its last close.
The stock has a 12-month price/earnings ratio of 60.46, one of the highest in the S&P 500 index and above GM’s 5.29 and Ford’s 7.94.
Tesla’s NACS is more widespread and reliable than CCS, or combined charging system, which the US government has tried to support by setting aside $7.5 billion in federal funds.
Many complain that the CCS charging infrastructure is inefficient or sometimes inoperative, leaving potential buyers afraid of being stranded on the road with nowhere to charge. However, increased use of Tesla’s Superchargers could create its own problems for the Musk-led company, according to Michael Austin, a research analyst at Guidehouse.
“There is a risk to Tesla either that the stations get too busy and disappoint Tesla owners, or that the competitive advantage of having exclusive access to the best network is removed,” Austin said.
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