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
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