It’s a great stock chart for Tesla and a terrible one for Ford. Year to date, Tesla’s shares are up 111%, and Ford’s are up 3%, which is much below the S&P.’s improvement of 12%. It would be easy to say the UAW strike is the reason, but that would be too simplistic,
Tesla has made several decisions that hurt most car companies. It has lowered prices on several of its models and, in some cases, has lowered them several times. On the other hand, Tesla has high margins for the auto industry, and it can afford to trade top line for market share for now. Another “decision” it has made is the delay of its Cybertruck, one of the most anticipated vehicle launches of the last decade. However, it claims a back order of two million, although not all of those will wait long enough for delivery.
Ford’s problems extend beyond the UAW, although the strike cannot help but cause a certain amount of financial injury. Even if it meets a modest level of the UAW’s demands, its annual costs will rise by hundreds of millions of dollars. That margin compression is permanent, or at least it will last several years.
Ford said its EV production levels would be well into a run rate of six figures by the end of this year. It has pushed that number into 2024, which has spawned skepticism about its ability to meet publicly stated goals.
Ford has sold only several thousand of its F-150 EV flagship, the Lightning. It will soon have competition with Chevy, Ram, and Tesla. What appeared to be a good head start has disappeared.
It will test Ford’s shares based on how they move after the UAW strike. Tesla shareholders don’t face that kind of challenge.
Also read: Every Major Automaker’s Plan to Go Electric
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.