Key Points
Ford stock is leaving Tesla in the rearview in 2025, surging about 40% year to date versus a roughly 7% rise for its higher-flying rival. A confluence of forces—sectoral tariffs, a sharpened EV strategy focused on profitability and the benefit of starting the year with unusually low expectations—has propelled shares higher, culminating in a 12.4% jump Friday to $13.84.
The comparison highlights a broader shift under way across autos. While Tesla bulls fixate on long-horizon projects like robo-taxis and humanoid robots, value-focused investors are rewarding companies that can protect margins, navigate policy crosswinds and deliver “better than feared” results in the near term.
Why Ford stock is beating Tesla in 2025
Three drivers stand out: policy, product mix and sentiment.
- Policy protection: The tariff regime announced by the Trump administration is affecting automakers unevenly. Ford manufactures about 80% of the vehicles it sells in the U.S. domestically, versus an industry average near 50%. That insulation means imported-car and parts tariffs hit Ford’s earnings less than peers that rely more on offshore production.
- Product and profit mix: With new emissions standards easing, Ford can lean more heavily into larger, higher-margin gasoline vehicles—segments where it already enjoys strong share—while pacing EV rollout to protect returns.
- Sentiment reset: Coming into 2025, Wall Street was bracing for tariff damage, quality issues and supply disruptions. As those headwinds proved manageable, results screened as “better than feared,” a classic setup for multiple repair.
That policy buffer has helped Ford stock outperform General Motors as well, even though GM shares are up a robust 31% year to date.
Tariffs: A home‑field advantage
Tariffs can be blunt tools, but they also rebalance cost structures. Because Ford’s production footprint is heavily U.S.-based, the company faces a smaller direct earnings hit from sectoral tariffs on imported cars and components. By contrast, competitors with deeper import reliance experience more pressure, both on cost of goods sold and on supply-chain complexity.
The advantage isn’t absolute—tariffs ripple through supplier networks—but it’s meaningful. It helps explain why Ford’s outlook, while not immune, has screened sturdier to investors.
EV reset: Profit first, units later
Through the first three quarters of the year, Ford’s EV business posted a $3.6 billion loss. Rather than chase volume at any cost, management is signaling discipline. CEO Jim Farley told investors EVs will likely account for around 5% of U.S. new-car sales for the foreseeable future, roughly half of recent levels, until more affordable models arrive and consumer economics improve.
With emissions standards lowered, the near-term math favors a mix shift back toward trucks and SUVs where Ford’s brand and margins are strongest. The pivot buys time to rework battery supply, cost bases and model pipelines without bleeding cash in a crowded segment.
Low expectations: The stealth catalyst
Expectations were subdued in January. Analysts fretted about tariff fallout, factory quality issues and supplier bottlenecks. As 2025 unfolded, the picture improved: Ford now sees roughly $8 billion in operating profit this year (excluding the impact of an aluminum-supplier fire that is crimping truck production), versus about $10 billion earned in 2024. When fears overshoot reality, even incremental progress can move shares.
Earnings, prices and where Ford stock stands now
Momentum built into the weekend. On Friday, Ford stock jumped 12.4% to $13.84, outpacing the S&P 500’s 0.8% gain and the Dow’s 1% advance. Tesla fell 3.4% to $433.72, leaving it slightly lower since reporting earnings Wednesday evening.
Under the hood, the market remains bifurcated. Tesla investors pay for long-duration optionality—robo-taxis, next-gen AI and robotics—while Ford investors center on durable cash generation and valuation support. That divergence shows up starkly in multiples: Ford trades near 10 times estimated 2026 earnings; Tesla fetches close to 190 times.
For value-oriented investors, that gap matters. At roughly 10x forward estimates, Ford stock embeds a margin of safety that can withstand cyclical noise better than high-multiple growth peers.
The latest tape: Ford, Tesla and the rest of autos
- Ford: +40% YTD; +12.4% Friday to $13.84
- Tesla: +7% YTD; -3.4% Friday to $433.72; modest decline since earnings
- GM: +31% YTD; solid but still trailing Ford’s advance
The dispersion reflects different investor mandates. Growth allocators prioritize optionality and platform scale, while value seekers prefer visible earnings, resilient cash flow and policies that favor domestic manufacturing.
How tariffs and policy are reshaping the auto playbook
Tariffs announced earlier in the year changed the calculus on sourcing and pricing. Ford’s high domestic content—about 80% of U.S. sales sourced from U.S. plants—limits direct cost passthroughs, providing operational flexibility. For others, higher reliance on imported parts increases sensitivity to tariff schedules, creating a competitive wedge.
A second-order effect is supply-chain durability. Firms with localized production may manage shocks faster, keep lines running and maintain dealer inventories—a key difference when demand ebbs and flows.
EV outlook: affordability first, then scale
The path to mass-market EV adoption runs through affordability: cheaper batteries, streamlined manufacturing and more reliable charging. Farley’s message suggests Ford will prioritize margin and cash preservation today to invest in that future.
Key variables to watch:
- Battery inputs: Costs for critical materials and chemistry choices
- Charging: Partnerships and infrastructure buildout that improve reliability
- Product cadence: Affordable models with economics that work at scale
- Incentives: How policy and tax credits evolve across segments and price points
Until those pieces click, the most rational strategy is steady, targeted EV development combined with strong execution in profitable ICE and hybrid segments.
Quality, supply and execution: turning headwinds into tailwinds
Ford entered 2025 under a cloud of manufacturing quality concerns and supplier disruptions. Management’s tone this quarter is more constructive. While the unexpected Novelis aluminum plant fire is disrupting truck output, the company has managed around the bottleneck while protecting overall profit guidance.
The lesson for investors: operational resilience matters. Delivering consistent build quality, minimizing recalls and de-risking supplier concentration all support margins and capitalize on tariff tailwinds.
Wall Street reactions: can Ford stock keep leading?
Opinions remain split, but several themes are converging:
- Multiple support: At about 10x estimated 2026 earnings, bulls argue Ford stock can sustain gains if execution holds and macro conditions remain stable.
- Earnings path: Roughly $8 billion in 2025 operating profit (ex-fire impact) versus $10 billion in 2024 points to a base of earnings power that could expand if cost controls and mix hold.
- Competitive positioning: Leaning into high-margin domestic segments while pacing EV exposure offers a clearer path to free cash flow than chasing share in a price-war environment.
Skeptics counter that the long-term prize still belongs to software-centric, autonomous-ready platforms—an area where Tesla remains better positioned if its robotaxi and AI roadmaps deliver.
Tesla’s year: gains, then gravity
Tesla’s narrative is unchanged: transformational potential against a demanding valuation backdrop. Bulls point to massive optionality; bears highlight sensitivity to execution risks and macro turns. Even after this year’s smaller stock gain, Tesla added roughly $120 billion in market value—about eight times the increase at Ford.
Near term, mixed earnings, guidance uncertainty and a rotation toward value have taken some air out of the trade. Longer term, outcomes hinge on delivering autonomy at scale, expanding energy storage and driving manufacturing breakthroughs.
What to watch next for both names
- Policy cadence: Any changes to tariff schedules and emissions standards that shift mix or margins
- EV affordability: Battery cost curves, model pricing and consumer incentives
- Supply-chain continuity: Updates on the aluminum supplier fire and mitigation plans
- Capital allocation: Dividends or buybacks versus investment needs, especially around EV platforms and software features
- Demand signals: Retail inventory, incentive spending and regional sell-through
Investors will also track whether Ford’s domestic manufacturing advantage persists and if Tesla’s long-horizon projects generate milestones that reignite growth enthusiasm.
Risks to the thesis
- Macro shocks: A growth slowdown or higher rates could compress auto demand and weigh on multiples
- Policy reversals: Rapid changes to tariffs or emissions rules could disrupt pricing and product strategy
- Input costs: Tightness in metals or components can squeeze margins
- Competitive intensity: Aggressive pricing from foreign and domestic rivals could erode unit economics
- Execution risk: Quality lapses, supply issues or delayed launches can undo sentiment gains
No single risk is decisive, but together they argue for disciplined position sizing and close monitoring of operating metrics.
Conclusion: different roads, different investors
Ford and Tesla continue to tell very different stories. Ford stock has the wind at its back from protective tariffs, a pragmatic EV reset and the clearing of low expectations. Tesla remains a high‑beta wager on autonomy, robotics and software at a premium valuation. Each appeals to a different investor playbook—value versus growth, near‑term cash flow versus long‑dated optionality.
For now, Ford’s approach is resonating in the tape. If policy stays supportive and execution remains steady, the company’s domestic footprint and profit mix provide a foundation for further gains. Should EV affordability inflect and long‑horizon bets crystallize, market leadership could swing back. Until then, the scoreboard favors the name with insulation, cash discipline and a valuation that offers room to run.
FAQ’s
Why is Ford stock outperforming Tesla in 2025?
Ford stock is benefiting from a tariff shield due to its high U.S. production (about 80% of U.S. sales), a pragmatic EV reset that prioritizes profitable trucks/SUVs, and “better‑than‑feared” results after low starting expectations. Estimated 2025 operating profit is about $8B (ex‑supplier fire impact), and valuation near 10x 2026 EPS gives Ford stock more multiple support versus higher‑multiple growth peers.
Is Ford stock a buy right now?
Ford stock offers value traits—domestic manufacturing, policy tailwinds and a reasonable multiple—yet investors should weigh risks: potential tariff/emissions policy changes, EV losses and affordability, supplier disruptions, and macro auto demand. Align the decision with your style (value vs. growth) and monitor guidance and margins. This is not financial advice.
What catalysts could move Ford stock next?
Key drivers include tariff and emissions updates, progress on resolving the aluminum supplier disruption, EV roadmap/affordable models, quarterly sell‑through and inventory trends, competitive pricing, and capital returns (buybacks/dividends). Positive updates on any of these can lift Ford stock, while setbacks could pressure sentiment.
Article Source: MSN
