Better EV Stock: Ford vs. Tesla
-The comparison between Ford (NYSE: F) and Tesla (NASDAQ: TSLA) is valuable and valid because it speaks to where the auto industry is headed and highlights the relative position of each company as it moves toward electric vehicles and robotaxis. Whether it's a legacy automaker (Ford) or a dedicated battery electric vehicle company(Tesla), the key opportunities and challenges are the same. So, which company is better placed to thrive in the future?
Affordable electric vehicles and robotaxis
Tesla's launch of its full-self-driving (FSD) robotaxi is sometimes seen as a tactical move as its electric vehicle (EV) sales and market share come under pressure in 2025, but nothing could be further from the truth. The reality is that major automakers, including Ford, and leading technology companies have invested billions in robotaxis and autonomous driving, and it's an integral part of the future of the auto industry.
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The reason behind the investment is a recognition that robotaxis have huge profit potential, not least because they offer a long stream of recurring income from ride-per-mile revenue.
Another reality is that EVs are not cheap, and if they are the future of the auto industry, automakers need to make them more affordable. They also need to offer robotaxis to make mobility more affordable.
However, don't take my word for it. Here's Ford's CEO Jim Farley in 2019 on autonomous driving and robotaxis: "The self-driving system is incredibly important to develop, but it's just one part of building a safe and scalable self-driving service that consumers can trust." Farley went on to outline a timeline for a "commercial self-driving service" in 2021, which Ford would fail to achieve.
As for affordable EVs, last year, Farley reiterated the need to offer smaller and more affordable EVs to achieve profitability as an EV maker.
The two things are strongly connected. You can't have robotaxi EVs if the vehicles aren't affordable. That's a point that resonated during a recent CNBC interview with Waymo, which has a robotaxi service already in place, yet co-CEO Tekedra Mawakana declined to outline a timeline for the company's profitability. Waymo's lack of profitability means its owner, Alphabet, is going to have to invest significant sums, at a loss, if it wants Waymo to build scale. That creates a huge opportunity for a company like Tesla that is just entering the market and potentially offers a much more commercial and scalable service.
Tesla's advantage in scaling robotaxis lies in its ability to transform existing Tesla vehicles into robotaxis, as well as its capability to produce a dedicated robotaxi, the Cybercab. Unlike Waymo, Tesla doesn't need to partner with automakers to build scale. Moreover, Musk has disclosed that Tesla has been in discussions about licensing its FSD to other automakers -- another route to long-term profitability.
Affordable EVs
I'll cut to the chase. If Tesla can make automated driving and robotaxis work, then there's only one winner here, and it's Tesla.
First, Ford is a long way from having a profitable EV business. For example, its Model E segment lost $5.1 billion in 2024, and then $849 million in the first quarter of 2025. Ford sold 22,550 EVs in the first quarter, implying it lost almost $38,000 on every EV sold. Moreover, its EV models, the Mustang Mach-E, the F-150 Lightning, and the E-Transit, are far from being affordable EVs.
In contrast, Tesla generated $7.1 billion in operating profit in 2024. Despite losing market share amid declining sales, it still dominated the U.S. market, holding 43.5% of the market in the first quarter of 2025. Ford was a distant second with 7.7%.
Both Ford and Tesla are planning to release low-cost models in the future, but given Ford's ongoing losses, Tesla's profitability, and its ability to lower its average cost per car, down from above $38,000 in early 2023 to below $35,000 in late 2024, the latter looks far better positioned to do so sustainably.
Robotaxis and FSD
Ford backed off its robotaxi/FSD plans in 2022, following the shutdown of Argo AI by Ford and Volkswagen after years of heavy investment. The company had been created to develop the technology and received billions of dollars in investment from Ford and Volkswagen. For reference, General Motors has also ended robotaxi development.
In contrast, Tesla is preparing for the official launch of its unsupervised FSD/robotaxi service in Austin, Texas, this month, and it may be live by the time you read this article. While the launch will be small and highly contained, it still marks the birth of Tesla's robotaxi offering. Musk believes Tesla will have a dedicated, low-cost robotaxi, the Cybercab, in volume production by 2026.
Indeed, Ford may end up licensing FSD from Tesla, and to his great credit, Farley has indicated an openness to partnering on FSD.
Ford or Tesla?
There is no guarantee that Tesla's robotaxi or FSD will be successful, and investors need to closely monitor events. Moreover, Musk has a history of being overly optimistic on such matters.
That said, the major automakers have been and are still pursuing the idea of lower-cost EVs and robotaxis and automated driving, and currently, Tesla remains the best-positioned company to meet those aims. It's where the industry wants to be, and Tesla is in pole position.
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