Tesla up, Ford down

24/7 Wall St. Perspectives

• Ford Motor Co. (NYSE: F ) and Tesla Inc . (NASDAQ: TSLA ) have reversed Wall Street views in just a few months.
• One stock is in retreat and the other has easily outperformed the S&P 500.
• Also: dividend legends to be kept forever.

Tesla Inc. (NASDAQ: TSLA ) was supposed to have a bad year as the electric vehicle (EV) market got more crowded and EV sales slowed in every major market except China. On the other hand, Ford Motor Co. (NYSE: F ) has reasserted itself as a profitable maker of popular gasoline-powered cars and has slowed costly investments in EVs. The stock market sees the story differently.

Over the past three months, Tesla’s stock is up 37%, Ford’s is down 14%, and the S&P 500 is up 5%. Tesla’s ‘robotaxis’ is coming next month. Ford disappointed investors with earnings for its most recently reported quarter.

Tesla vs. Ford

Ford stumbles and Tesla shines.

Ford’s problem is easy to understand. Its revenue in its most recently reported quarter was above expectations at $44.8 billion, and earnings per share were $0.47 versus expectations of $0.68. The main cause of Ford’s problem was warranty costs. Ford has promised for the past two years to fix the quality problems, but Wall Street has grown impatient. Ford also recently began pulling back from its $30 billion EV program, which investors generally considered a good decision, but not enough to offset the warranty news.

Low expectations may have helped Tesla. Its latest quarterly sales and production figures show its growth has flattened. In the second quarter, it produced 411,000 vehicles and delivered 444,000. Tesla’s period of rapid growth appeared to be over.

However, investors found that Tesla has 49% of the electric vehicle market share in the United States this year. The fear that old car manufacturers were eroding it was not valid. Then sales in China, the world’s largest electric vehicle market, were strong. Investors began to believe that Tesla was once again on a growth path. “This China strength comes at a very opportune time for Tesla, helping to offset continued weakness in the US and Europe,” Dan Levy told CNBC. He expects Tesla to deliver 470,000 vehicles worldwide in the third quarter, which would be a record.

If the robotaxi is truly an autonomous vehicle, Tesla would have done something no other company in the industry has done. Until now, self-driving cars require a driver to assist the system. The industry has been working on a fully autonomous vehicle for years. No company was able to penetrate.

Ford and Tesla reversed Wall Street’s views in just a few months.

Three warning signs Ford is in trouble

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