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Ford's Electric-Truck Edge: Why the F-150 Lightning Could Outpace Tesla's Model 3

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  Published in Stocks and Investing on Sunday, November 16th 2025 at 19:58 GMT by The Motley Fool

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Ford vs. Tesla: Which EV Stock Holds the Edge? – A Summary of The Motley Fool’s 16 Nov 2025 Analysis

The Motley Fool’s November 16, 2025 “Better EV Stock: Ford vs. Tesla” article dives deep into a heated question that’s been swirling among investors for months: Should you put your money in Ford’s electric‑vehicle (EV) bets or stay loyal to Tesla’s established EV empire? The piece is a comprehensive look at the financials, strategic positioning, and risk factors that separate the two automakers in the burgeoning EV market. Below is a thorough summary of the key points, along with additional context pulled from related Fool articles linked within the original piece.

1. The Premise: Two Giants, Different Paths

The article opens by framing the EV race as a classic “new‑comer vs. incumbent” battle. Tesla, the first high‑profile EV company to go public, has built a brand synonymous with innovation, high‑performance electric cars, and a vertically integrated supply chain. Ford, on the other hand, is a 190 cars‑old legacy automaker that has been investing heavily in electrification as a core part of its future strategy—most notably with its Mustang Mach‑E, the upcoming F‑150 Lightning, and a sprawling battery‑cell partnership with SK On.

The Fool’s analysts argue that, while Tesla’s valuation remains premium, Ford’s more conservative growth trajectory and the ability to capitalize on its vast dealer network may offer a better risk‑adjusted return for the long‑term investor.

2. Market Share & Volume Outlook

• Tesla is projected to sell roughly 5 % of the U.S. passenger‑car market in 2025, up from 4 % in 2024, largely driven by the Model 3 and Model Y. The company’s growth is expected to plateau in the next 3–5 years as supply chain constraints tighten and competition intensifies.

• Ford is aiming for a 10 % share of the electric‑truck market in the U.S. by 2030. The F‑150 Lightning is already moving fast, with a current market‑share of 20 % among new EV pickups—well above its rivals.

The article highlights a key point: EV trucks have higher gross margins than passenger cars. Ford’s focus on trucks, therefore, could help it offset the lower margins on its passenger‑car line.

3. Gross Margins & Cost Dynamics

Tesla

• Gross margin (2024): 23 % – a figure that has dropped from a peak of 29 % in 2021. Analysts attribute this to rising battery costs, higher labor costs, and a shift to more mainstream models.
• Battery cost trend: Tesla’s “Biden‑Suez” article (link in the original post) suggests that its cost curve is flattening but still lagging behind industry averages.

Ford

• Gross margin (2024): 18 % on EVs, but the overall margin on the entire vehicle line is 15 %—an improvement from 13 % in 2023 thanks to the F‑150 Lightning.
• Battery cost advantage: The partnership with SK On is expected to bring battery cell prices down to $90 per kWh by 2026, compared to Tesla’s current $110–$120 per kWh. The article cites a link to a 2024 Ford‑SK On memorandum of understanding that underpins this projection.

Ford’s lower cost structure gives it an “earnings cushion” that could protect the company during the inevitable “price wars” Tesla may face if new entrants flood the market.

4. Cash Flow & Balance Sheet Strength

• Tesla has a robust cash position, with $25 billion in cash and short‑term investments as of Q3 2024. However, the company’s debt load is climbing, with a $10 billion increase in long‑term debt for R&D and battery development.

• Ford has a $30 billion operating cash flow from its traditional internal combustion (IC) business and has been steadily reducing its debt load. Ford’s $5 billion annual capital expenditure on EVs is projected to grow to $12 billion by 2026, according to a linked “Ford 2025 Capital Expenditure Outlook” article.

The analysts emphasize that Ford’s “dual‑stream” business—IC cars and trucks plus emerging EVs—provides a smoother cash‑flow profile than Tesla’s more volatile earnings.

5. Strategic Differentiators

The article notes that Tesla’s reliance on a single high‑profile product (the Model 3/Model Y) is a double‑edged sword: while it drives brand equity, it also makes the company vulnerable if that model faces production delays or price cuts. Ford’s diversified lineup, particularly in the highly lucrative pickup segment, provides a more robust revenue base.

6. Risks & Challenges

Tesla

• Regulatory Risk: FSD has been under scrutiny by the NHTSA, and a major incident could derail the company’s software vision.
• Margin Compression: Rising battery costs and a need to price aggressively in a competitive market.
• Geopolitical Exposure: China is a significant market for Tesla, and trade tensions could impede sales.

Ford

• Transition Risk: Shifting from a fossil‑fuel legacy to a fully EV‑powered future may dilute the brand if not managed carefully.
• Supply Chain Constraints: While diversified, Ford’s battery supply may still be impacted by global semiconductor shortages.
• Margin Pressure: Even though EV trucks have higher margins, the overall margin compression could bite if battery prices don’t fall as projected.

The article concludes that while both companies face distinct risks, Ford’s risk profile appears more “balanced” for investors seeking long‑term upside without the extreme volatility Tesla’s valuation can sometimes produce.

7. Valuation Snapshot

• Tesla (TSLA): Price‑to‑earnings (P/E) ratio of +120x (current FY2025 estimate), high price‑to‑sales (P/S) of +30x, and a forward‑looking price‑to‑book (P/B) of +70x. These multiples are justified by its high growth expectations but leave little margin for error.

• Ford (F): Current P/E of +20x on a 12‑month basis, P/S of +3.5x, and P/B of +2.5x. The article’s linked “Ford Valuation Model” (from the Fool’s research portal) suggests that a 10‑year growth scenario would bring Ford’s P/E to +35x, still well below Tesla’s current multiple.

The authors caution that these valuations are only as good as the assumptions in the growth model. They also stress that “value” in the EV space is not solely a number; the ability to execute a strategic vision matters as much.

8. Bottom Line & Recommendations

The Fool’s analysts lean toward Ford as the better long‑term EV investment because:

1. Stable Cash Flow – The company can fund EV growth without taking on excessive debt.
2. Diverse Revenue Streams – Trucks, passenger cars, and commercial EVs provide a cushion.
3. Competitive Cost Structure – A multi‑partner battery strategy and lower per‑unit manufacturing costs create a margin advantage.

Tesla, however, remains an attractive growth play for investors who believe the company can maintain its high margins and dominate the premium EV segment. They note that Tesla’s autonomous software and energy storage verticals could become game‑changing.

The article’s final recommendation is to consider a balanced approach: allocate a moderate portion of an EV‑focused portfolio to Tesla for upside potential, while allocating the majority to Ford (or a broader EV index) for stability and a more traditional automotive foundation.

9. Further Reading (Links Within the Original Article)

• Ford’s EV Strategy – A Fool analysis that dives deeper into the F‑150 Lightning’s market dynamics and production timelines.
• Tesla’s Battery Cost Curve – An in‑depth look at how battery prices have evolved over the past decade and projections for the next five years.
• Autonomous Driving Landscape – An overview of the U.S. regulatory environment for self‑driving vehicles, highlighting the potential impact on Tesla’s FSD roadmap.
• Global EV Market Forecasts – A market research report that breaks down regional adoption rates and government incentives that could affect both companies.

These resources provide additional context and reinforce the points raised in the main article, offering readers a more granular understanding of each company’s operational realities and market potential.

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