What happened
Tesla (TSLA -3.40%) shares continued a weeklong rally today that has moved the stock of the electric vehicle (EV) leader up nearly 14% since the middle of last week. Today, the stock closed near the day's highs, up 4.9%.
So what
Tesla shareholders might have competing automaker Ford (F 6.10%) to thank for today's gains. That's because Ford held a meeting with investors today outlining its plans to grow its EV business profitably -- and it sounds a lot like Tesla's strategy. Even better for Tesla is that Ford seems to be confining its focus for EV sales to certain markets. That makes one less competitor for Tesla to have on its radar in some areas.
Now what
Ford is hoping to match Tesla's success in satisfying the demand for electric vehicles, but it will focus on markets with less competition, and with more unique offerings like its commercial transit vans. Ford CEO Jim Farley called Ford's commercial customers the company's "secret weapon" when it comes to its EV segment.
Image source: Tesla.
Farley also said his company will concentrate on areas where it sees "unprecedented growth for us instead of jockeying for slivers of [market] share." That wasn't the only thing that has investors feeling more confident in Tesla today, though.
Farley also said Ford hopes to make its EV segment profitable using software sales and updates. That's a similar strategy to what Tesla CEO Elon Musk said is behind his company's series of vehicle price drops in recent months. Musk wants to focus on volume right now. He's expecting autonomous driving technology to be rolled out to Tesla vehicles in coming years, providing software-like profit margins.
Ford told investors today that it, too, would like to follow that strategy. Farley stated: "We're developing and delivering connected, digital products that give customers tailored ownership experiences."
Whether Ford can match Tesla's success remains to be seen. But Tesla already has enviable profit margins in the auto sector, and has a proven business model. Some investors used Ford's seeming confirmation of that to buy Tesla stock today.
