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Why Tesla Stock Blasted 5% Higher on Tuesday

Motley Fool - Tue Jun 20, 2023

What happened

The power and influence of Tesla(NASDAQ: TSLA) on the electric vehicle (EV) market only continue to grow.

The latest example of this is the continuing take-up of the company's once-proprietary charging standard. Another manufacturer has signed on to a part of this, and the EV leader's share price rose commensurately on Tuesday. It closed the day more than 5% higher in sharp contrast to the 0.5% decline of the S&P 500 index.

So what

EV pickup truck maker Rivian announced on Tuesday it has signed an agreement with Tesla that would allow Rivian drivers to access Tesla's Supercharger network throughout North America. For its customers, Rivian will make available an adapter allowing them to plug their connectors into Tesla chargers, which operate on the North American Charging Standard (NACS).

Despite its fairly generic-sounding name, NACS is actually a standard developed and implemented by Tesla. Earlier this year, the company made NACS open-source. Since then, several top manufacturers have signed similar access deals with the company. These include Ford and General Motors.

Meanwhile, Hyundai CEO Jaehoon Chang said at his company's Investor Day on Tuesday that the Korean carmaker is considering the adoption of NACS. It joins fellow global manufacturer Stellantis, which stated last week it was also contemplating such a measure.

Now what

Like the company or loathe it, Tesla is becoming ever more the pace-setter of the EV segment. We can fully expect other manufacturers, incumbent and otherwise, to sign on to NACS and for Tesla to set new standards for other aspects of EV technology.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends General Motors and recommends the following options: long January 2025 $25 calls on General Motors. The Motley Fool has a disclosure policy.

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