Did Tesla Just Give Away Its Biggest Competitive Advantage?

Stock markets performed well on Friday, ending the week with solid gains for major market benchmarks. The Nasdaq Composite (^IXIC 1.11%) and S&P 500 (^GSPC 0.87%) finished at their best levels of the year, although the Dow Jones Industrial Average (^DJI 0.67%) remains well off its 2023 highs as tech stocks once again took center stage.

Data source: Yahoo! Finance.

Apart from various pieces of AI-related hype, one big piece of news came from the electric vehicle arena. Tesla (TSLA -3.40%) made a big deal with automaker rival Ford Motor Company (F 6.10%), and while the advantages for Ford customers are obvious, it's not entirely clear whether the gains that Tesla will reap from the arrangement will outweigh the potential loss of goodwill from its notoriously loyal customers.

Ford, Tesla stocks both rise on agreement

Ford and Tesla announced that Ford's electric vehicle customers will get access to the Tesla Supercharger network beginning in early 2024. With the deal, Ford EV owners will enjoy more than 12,000 additional charging options for their cars and trucks, adding to the more than 10,000 fast chargers that Ford already claims as part of its BlueOval Charge network.

Investors on both sides of the deal celebrated the news. Ford stock jumped more than 6% on Friday. Tesla shares were up almost 5%, representing a much larger rise in market capitalization because of Tesla's greater size.

It's obvious that the deal is a huge boon for Ford customers. Range anxiety is a major obstacle for many would-be EV buyers, particularly those who need to use vehicles for longer distances. Despite the size of Ford's network and the proliferation of third-party charging companies, EV drivers have given mixed reviews to the reliability of charging options available to them. The Supercharger network, by contrast, has been an essential element of Tesla customers' confidence in driving their vehicles.

Not all about the mission

Some observers noted that Tesla has said that its overarching corporate goal is to accelerate the transition to a sustainable future, in part through the electrification of the transportation industry. In that vein -- and forgetting for a moment any fiduciary responsibility to shareholders -- Tesla's move makes clear sense.

From a more financial perspective, it's not entirely clear exactly what the terms of the Ford-Tesla agreement will be. According to Ford's press release, owners of the Mustang Mach-E, F-150 Lightning, and E-Transit will have to activate and pay for Supercharger access, as well as getting an adapter and integrating their vehicle software with Tesla's network. Starting in 2025, Ford will start using Tesla-compatible connectors, which will make adapters unnecessary.

Whether or not Tesla gets a financial boost from opening up Supercharger stations to Ford, the company is taking on a big risk. One selling point of Tesla vehicles has been superior access to Superchargers. If Tesla owners start seeing Ford owners taking their spots -- or worse yet, taking up all the spots at a given location -- then it could introduce them to an annoyance that until now, they haven't generally had to share charging resources with owners of other brands of EVs.

Of course, Tesla has built up customer loyalty for years. It won't disappear overnight. But the more steps the car company takes to give up key competitive advantages voluntarily, the more shareholders should worry that the company and its executive team might not entirely have their financial interests aligned with their own.