Tesla's (NASDAQ:TSLA) meteoric rise this year has been nothing short of impressive, up over 250% year to date. The company itself has a lot going for it: its Model S received a 99 out of 100 from Consumer Reports, the best score for an auto in the publication's history. Aside from a quality product, Tesla's visionary CEO Elon Musk can apparently take any far-fetched idea and turn it into business gold. Despite that, I still believe Tesla's valuation has risen too high too quickly and will face competition from auto giants like Ford (NYSE:F) that could give Tesla trouble sooner than you think.

Electric vehicles
Ford's share of EVs in the U.S. has grown to nearly 16% this year through June, which is quadruple what it was last year. Ford's success in EVs is part of the reason that it has been able to fuel its overall market share growth in the U.S. by a full percentage point – the most by any full-line automaker, according to the company. 

Photo credit: Ford Motor Company press release.

Ford's success derives from a slew of vehicle options, as shown above. Now I understand that Tesla's Model S shouldn't be directly compared to Ford's models because it isn't an apples-to-apples comparison. However, when Elon Musk brings out the mass-produced vehicle at perhaps half the cost of the Model S the lines of competition between Tesla products and Ford's hybrids and EVs will definitely begin to blur.

Those who think that Tesla is the future of the industry may be correct, but those same people often think that juggernauts like Ford, General Motors (NYSE:GM) and Toyota (NYSE:TM) will simply roll over and die – which I believe to be very foolish.

Ford will be expanding electrification engineering jobs by nearly 50% to have more than 500 salaried employees working on research and development. It's also investing $50 million in EV development centers to further strengthen its vehicle quality. In addition to all that, Ford is also doubling its electrification battery-testing capabilities this year helping to speed hybrid and EV development by as much as 25%.

"This investment in new engineers and expanded facilities helps us prepare for growth," said Raj Nair, group vice president, global product development in a Ford press release. "All of us at Ford remain absolutely committed to offering customers a choice of leading fuel-efficient vehicles – from EcoBoost-powered gasoline engines and hybrids to plug-in hybrids and electrified vehicles."

Tesla isn't the only one that has to keep an eye on Ford's progress. According to Ford, last month 64% of C-MAX hybrid buyers switched over from non-Ford brands. Toyota's Prius was the vehicle most often traded in for the C-Max – contributing to why Toyota's share in the EV market dropped eight share points while Ford's claim jumped 12 share points.

Bottom line
Only time will tell how Tesla fares in the U.S. market as its groundbreaking vehicles continue to gain popularity and perhaps decline in price. Tesla as a company is very impressive and is disrupting an automotive industry that has long been dominated by the same old model of using internal combustion engines. One thing we know for sure is that businesses adapt or die, and as demand grows for vehicles such as Tesla's Model S, you can bet that Ford, GM, and Toyota will eventually join the party in full force by throwing hundreds of millions of dollars into research and development, which will change everything. To put it bluntly, I'm rooting for Tesla but I'm staying on the sidelines and avoiding a long position for now – Ford seems like a safer bet with plenty of room to run for investors.