TSLA or F: Which Stock Deserves a Place in Your EV Portfolio?

Core Insights - Tesla, once the dominant name in the electric vehicle (EV) market, is now facing significant challenges as competition increases and demand weakens [2][3][24] - Ford is repositioning its strategy towards affordable EVs, aiming to capture a broader market segment [10][13][25] Tesla's Current Situation - Tesla experienced its first annual delivery decline in 2024, with Q1 and Q2 2025 deliveries falling 13% and 13.4% year over year, respectively, totaling 384,122 vehicles [3][10] - The decline is attributed to demand issues rather than production, as inventory levels have increased despite steady production [4][8] - The lack of new mainstream vehicle launches and increased competition have contributed to Tesla's struggles [4][5] - CEO Elon Musk has indicated that Tesla is expected to deliver fewer cars in 2025 than in 2024, marking a significant shift from previous growth expectations [7][24] - Financially, Tesla reported its steepest revenue drop in over a decade, with automotive revenues down 12% and gross margins narrowing to 17% [8][24] Ford's Strategic Shift - Ford is pivoting towards affordable EVs with its Universal EV Platform, targeting a $30,000 midsize pickup by 2027 [10][14] - Despite facing losses of approximately $12 billion in its EV division over the past two and a half years, Ford is adapting its strategy rather than doubling down on high-end models [11][13] - The new platform aims to improve production efficiency, reducing parts and assembly times significantly, which is crucial for achieving the $30,000 price target [16][25] - Ford's stock has increased by 18% year-to-date, contrasting with Tesla's 16% decline, and Ford is trading at a lower sales multiple compared to Tesla [10][20] Market Positioning and Valuation - Ford's forward sales multiple stands at 0.29, below its five-year median, while Tesla's is at 10.58, indicating a potential overvaluation [20] - Consensus estimates for Ford's earnings per share (EPS) have improved, while those for Tesla's have declined over the past 60 days [22][23] - The choice between investing in Tesla or Ford hinges on investor preferences for premium brands versus legacy automakers focusing on affordability and scale [24][25]