Tesla’s Market Cap Is 23 Times Ford’s

By Douglas A. McIntyre Published Nov 11, 6:25AM EST

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Tesla’s Market Cap Is 23 Times Ford’s — © Ford F-150 Lightning Platinum (2024) (53621481713) (BY 2.0) by Charles from Port Chester, New York

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Tesla Inc. (NASDAQ: TSLA | TSLA Price Prediction) shares are up handily this year while Ford Motor Co. (NYSE: F) stock is in retreat.
Now Tesla’s market cap is 23 times that of Ford.
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Tesla Inc. (NASDAQ: TSLA) shares surged well over 20% last week after the presidential election. CEO Elon Musk has a close relationship with Donald Trump. Still, it is unclear why that would cause a rise in valuation rather than its financial performance and the self-driving car it has introduced. Tesla’s market cap has surged to over $1 trillion. As Tesla’s shares have risen 25% for the year, Ford’s are down 10%. Tesla’s market cap is 23 times that of Ford.

Financial results only partially tell the market cap story. For the third quarter, Tesla produced approximately 470,000 vehicles and delivered about 463,000. Tesla’s revenue rose 8% to $25.2 billion. However, auto revenue was up only 2% to $20 billion. Per-share earnings for the company rose 17% to $0.72. The numbers were not impressive.

Tesla continues to face challenges. For the first time this year, its electric vehicle (EV) market share in the United States slipped below 50%. Its competition in China jumped as local manufacturers, led by BYD, post rising sales month after month. There is a worry that these Chinese companies will eventually move into the United States and European Union. Today that is blocked by tariffs, which gives Tesla a measure of protection.

Ford’s results have been highly disappointing. The number two U.S. car company loses over $1 billion a quarter in its EV business. In October, its EV sales fell compared with the same month a year ago. Ford’s warranty costs have hit earnings by hundreds of millions of dollars each quarter, although Ford will not give an exact number.

Ford is also a captive of its only real success. Its F-150 gasoline-powered full-size pickup has been the best-selling vehicle in the United States for four decades, but it accounts for 38% of Ford’s U.S. sales. Ford is a company with U.S. revenue built on one pillar.

Is Musk’s relationship with Trump the reason for the considerable difference in the market cap between Ford and Tesla? To some extent, yes. However, Ford’s fumbles are just as critical a reason.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.