A great deal has happened in the car industry this year. Among the most important events were the United Auto Workers (UAW) strike and the growing competition among car companies for electric vehicle (EV) sales. As the winners and losers are sorted out, one sign of changing fortunes is that Tesla Inc. (NASDAQ: TSLA) is worth 20 times more than Ford Motor Co. (NYSE: F) based on market cap. That is a breathtaking difference.
Among the reasons for the gulf in value is that Tesla’s stock is up over 120% in 2023, and Ford’s is down 11%. The S&P 500 is up 20% over the same period. Tesla’s market cap is $765 billion. Ford’s is just below $40 billion. Yet, Ford is by far the larger of the two in terms of revenue.
Why Ford Is Hurting
Ford cannot afford both the UAW contract and its future product management aspirations. Ford said it would push back about $12 billion in EV investment. Certainly, this is partly due to a lack of demand for EVs. Another reason is to slow corporate spending overall. This lack of demand for Ford EVs has been obvious. Ford has sold only a few thousand EVs this year in the United States. Its ambitious plan to have a 600,000 EV production run rate this year has been pushed back until the end of 2024. (See the 15 worst-selling electric vehicles this year.)
Tesla cut prices several times this year. It has been trading margins for market share. However, Tesla remains profitable, while Ford’s EV operations have not been. Tesla now produces over 400,000 vehicles a quarter. Its market share was supposed to drop quickly as legacy manufacturers hit the market with their EVs. That has not happened. Tesla will soon come to market with its Cybertruck, a pickup aimed at the largest segment of the U.S. vehicle market.
For Ford, the EV market has become a billion-dollar sinkhole. For Tesla, its success is confirmed by each quarter’s production figures.
In 20 Years, I Haven’t Seen A Cash Back Card This Good
After two decades of reviewing financial products I haven’t seen anything like this. Credit card companies are at war, handing out free rewards and benefits to win the best customers.
A good cash back card can be worth thousands of dollars a year in free money, not to mention other perks like travel, insurance, and access to fancy lounges.
Our top pick today pays up to 5% cash back, a $200 bonus on top, and $0 annual fee. Click here to apply before they stop offering rewards this generous.
Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
