Please ensure Javascript is enabled for purposes of website accessibility

Stock Markets Stay Strong; Can Ford and Tesla Both Win?

By Dan Caplinger - May 26, 2021 at 4:38PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Wall Street seems increasingly comfortable with the current environment.

The stock market was generally strong on Wednesday, with a decided preference for more aggressive small companies over their larger counterparts. That was plainly obvious in how the Dow Jones Industrial Average (^DJI -0.86%) and S&P 500 (^GSPC -1.29%) settled for small moves, while small-cap benchmarks were up nearly 2% on the day. The Nasdaq Composite (^IXIC -2.01%) saw the largest benefit from the trends favoring smaller stocks.


Percentage Change

Point Change




S&P 500



Nasdaq Composite



Data source: Yahoo! Finance.

The electric vehicle (EV) industry is turning out to be a battleground between well-established automakers with long histories of innovation and newer entrants with an eye toward disrupting the auto industry. Interestingly, shares of both Ford Motor (F -1.67%) and Tesla (TSLA -2.05%) were higher on Wednesday. Despite the two companies being apparent rivals in the EV space, some investors are starting to think that there might be a place for both auto giants in the shift away from vehicles that burn fossil fuels. Below, we'll look more closely at both Ford and Tesla.

Ford has a plan for EVs

Shares of Ford Motor vaulted higher by nearly 9% on Wednesday. The Michigan-based giant revealed more of its strategy to take advantage of the electric vehicle shift, and investors generally liked what they saw from Ford.

The new Ford+ strategy will involve a massive financial commitment from the automaker. Ford expects to spend more than $30 billion on EV-related development and technology within the next four years, which is $8 billion more than it had previously committed to investing. The automaker has set an ambitious goal of having 40% of its global-vehicle volume consist of all-electric vehicles by 2030, driven by electrifying key brands like the F-150 Lightning and the Mustang Mach-E.

Ford F-150 Lightning EV truck hauling a trailer on a road near a bay.

Image source: Ford.

Yet Ford+ goes beyond EV. Ford will also establish its Ford Pro commercial vehicle services and distribution business, with an emphasis on corporate and government customers. Fleets will incorporate both electric and internal combustion vehicles but bundled with key services of greatest value to commercial users.

In addition, Ford anticipates providing a far greater array of connected services, including over-the-air system updates, digital tools and technology developed both in-house and from third-party providers, and advances in driver-assistance technology. Ford even called out Tesla by name in its press release, hoping to serve a wider audience than its rival within the next several years.

Tesla gets a rebound

Some investors might have feared that what's good for Ford would be bad for Tesla, but that wasn't the case. Tesla shares picked up more than 2% on Wednesday.

The move higher came even as Tesla made a move that would actually detract from its driver-assist functionality. The automaker said that it would no longer provide radar equipment as part of its Autopilot system for Model 3 and Model Y vehicles built for the North American market. Instead, these vehicles will rely solely on camera vision and neural net processing.

Tesla's approach is interesting, given the rest of the industry's increasing reliance on radar and lidar systems. Nevertheless, CEO Elon Musk has long been skeptical of the need to go beyond visual information, hoping that the Tesla Vision platform will be able to scale up quickly.

Plenty of room for everyone

Although the narrative for many in the auto industry has been one of Tesla displacing legacy automakers like Ford and eventually rendering them obsolete, the reality is more likely to reflect the various advantages and consumer preferences of each brand. There's more than enough room in this growth market for both Ford and Tesla to thrive, and it'll be interesting to watch how they and others jockey for position in this innovative, fast-growing market.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Ford Motor Company Stock Quote
Ford Motor Company
$15.88 (-1.67%) $0.27
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
$33,706.74 (-0.86%) $-292.30
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
$4,228.48 (-1.29%) $-55.26
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
$12,705.22 (-2.01%) $-260.13
Tesla, Inc. Stock Quote
Tesla, Inc.
$890.00 (-2.05%) $-18.61

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.