Detroit is right to give in to Tesla (this time). opinion

Tesla Model S with chargerRebecca Cook (Reuters)

Sometimes it makes sense to throw in the towel. General Motors announced Thursday that it will adopt Tesla’s electric supercharger design, joining Ford and potentially promoting the technology as standard in the United States. The move paves the way for burgeoning battery divisions while ceding modest revenue to Elon Musk’s signature. But the danger is that other, more lucrative parts of their cars, such as dashboard entertainment, are also at risk.

Three electric vehicle charging component designs have dueled in North America. It’s a problem: Drivers need to be able to reliably charge batteries during long trips. Arriving at a gas station with the wrong plug can put a buyer off.

The union will help around Tesla’s design. Its supercharger network already has 60% of the fast chargers in the US and Canada, which quickly recharge batteries. General Motors and Ford customers will now have access to the most widespread infrastructure. Tesla, Ford and General Motors will account for three-quarters of electric vehicles sold by 2022, according to Experian.

And while GM and Ford customers will now pay Tesla to charge, analysts at Wedbush and Piper Sandler put the revenue opportunity for Musk at only about $3 billion by 2030. That’s 4% of Tesla’s revenue in 2022.

But Detroiters should be careful not to give too much. There are many parts for your electric car beyond charging that others have up for bidding. Apple and Google offer software that replaces a system Information and entertainmentTesla wants others to adopt its self-driving technology. GM CEO Mary Barra says her company will retain control of both, but Ford CEO Jim Farley already says the automakers have “lost out” to Apple on car content. Staying in control is crucial: GM’s master plan calls for software and “new businesses” to make up more than a quarter of its revenue by 2030, with an operating profit margin twice that of auto manufacturing. Barra and Farley gave tech startups a foothold; Tesla f bigtech They will try to take the next step.

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