Ford Stock Outpaces Tesla Fivefold — Here's Why Investors Are Watching Closely

In a surprising turn for auto investors, Ford Motor Company (NYSE: F) has outperformed Tesla, Inc. (NASDAQ: TSLA) by a wide margin this year.

According to data, Ford’s share price has increased by nearly 37%, while Tesla’s has risen by only around 8% in the same period.

Strong Earnings and Practical Execution

Ford’s recent earnings report surprised the market. The company posted adjusted earnings per share of $0.45 (£0.34) on revenue of $50.5 billion (£37.88 billion), both well ahead of analyst expectations. While the automaker cut its full-year earnings outlook due to supply chain disruptions—notably a fire at an aluminium supplier—the positive near-term performance boosted investor confidence.

The result: Ford shares leapt more than 10% in a single trading session and outpaced the S&P 500. Investors appear to value the resilience of Ford’s core business, particularly in a year where many legacy automakers are under pressure to deliver.

Tailwinds in Tariffs, Regulatory Shifts and Value Perception

Another factor driving Ford’s momentum is shifting policy dynamics. According to an analysis, Ford and other US automakers are benefiting from tariff relief and a more lenient regulatory environment, both of which support profitability.

At the same time, Ford is trading on relatively modest expectations. Many investors had assumed that the company’s transition to electric vehicles (EVs) and software-defined cars would weigh heavily on its results.

Instead, Ford is showing that the legacy vehicle business remains strong while executing strategic EV and mobility initiatives behind the scenes. This contrasts with Tesla’s premium valuation, which boasts a far higher P/E ratio than Ford’s, despite Tesla’s slower-than-expected recent performance.

Tesla: Leader, But Under Pressure

Tesla remains the undisputed leader in pure electric vehicles and global EV sales volumes. Yet the market seems to be factoring in increased risk: high expectations, ambitious profit targets and mounting competition from both legacy manufacturers and Chinese newcomers. Some analysts argue that Tesla’s premium is built more on future potential than current performance.

Meanwhile, Ford is benefiting from its status as a more mature business with stable cash flows, which appeals to value-oriented investors.

What’s Behind the Outperformance?

Several key themes underpin Ford’s rise:

• Execution Confidence: Ford’s strong sales growth (up 9 per cent year-on-year in Q3) and consistent cost reductions help build investor trust.
• Valuation Advantage: With a much lower P/E ratio than Tesla, Ford may be perceived as undervalued, making it a more attractive risk-reward trade in 2025.
• EV Transition on its Terms: Ford is advancing its EV strategy steadily rather than betting everything on it. This approach may appeal in a market where EV disruption is no longer only about winners and losers, but about execution.
• Tailwinds from Policy: Easing tariffs and favourable regulatory shifts give legacy automakers a better margin environment than many had expected.

The Risks Remain

Of course, caution is necessary. Ford’s EV business remains a work in progress, and the outlook for 2026 includes uncertainties such as supply disruptions and slower growth in electric mobility. Tesla, on the other hand, still holds a powerful brand, global scale and leadership in software-defined vehicles, even if near-term expectations are muted.

Investors should also remember that past outperformance does not guarantee future results. A company like Ford, even when firing on multiple cylinders, faces competitive threats and disruptive change at a faster pace than at any time in its history.

Ford’s share performance in 2025 has clearly outpaced Tesla’s, not just slightly, but by a meaningful margin. The companies are at trade-offs in investor sentiment: Ford is being rewarded for execution, value, and stability, while Tesla is being held to lofty expectations and absorbing pressure from increased competition.

For investors seeking stability and value in the auto sector, Ford looks compelling right now. For those who are convinced of Tesla’s long-term brand and technology dominance, the premium valuation may still be justified. Ultimately, the story is not about ‘old vs new’ alone; it’s about whose strategy delivers amidst disruption.