Ford looked like the legacy car company stock to beat earlier this year. That has ended over the past few months. Shares are down by 27% this year, while the stock of the company it is chasing, Tesla, has retreated only 5%. That makes the gulf between their market caps even bigger. Ford’s is $61 billion. Tesla’s is over $1 trillion.
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What happened? Tesla proved it could move through supply chain issues that have crippled the industry. In the most recent quarter, automotive income rose 87% to $16.7 billion. Net income for the entire company rose 658% to $3.3 billion. Total deliveries rose 68% to 310,000.

In Ford’s most recent quarter, revenue rose 5% to $37.7 billion and it made $12.3 billion. It had lost money in the same period a year ago. To some extent, these numbers were not important. Ford’s stock run-up was based on the growing assumption that it was the legacy car company with the best chance to move quickly into the electric vehicle (EV) business.

The optimism about Ford was largely built on the electric version (F-150 Lightning) of the best-selling vehicle in America for over four decades (Ford F-Series). Now, there are worries the ability to fulfill demand will slow due to supply chain problems. This raises the question of whether people who have made reservations to buy the pickup will wait.

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How much is at stake based on the Lightning launch? Ford’s executive board chair, who runs the company even though he does not have the chief executive title, recently told The New York Times, “If this launch doesn’t go well, we can tarnish the entire franchise.” While some of the worries could be about product quality, a great deal has to do with the production pace.

Ford has gone from being a hot stock to one that reflects the skepticism about its EV future.

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