EV charging station. Flickr Image.
Tesla is a first mover in the electric vehicle space. On the other hand, Ford only got on the battery EV bandwagon in 2020 when it first introduced the all-electric MUSTANG MACH-E.
Moreover, Tesla might be on track to delivering 3 million EVs by the end of 2024 while Ford has only sold 100,000 EVs as of 2023.
While Ford may not be the first mover in the EV space, it is still a formidable player in the automobile industry. Ford has the necessary resources to take on Tesla in the EV race.
For example, Ford’s research and development spending in fiscal 2023 was nearly 300% higher than what Tesla spent in the same period on a dollar-to-dollar basis.
Therefore, Ford Motor can still be a better bet than Tesla’s stock in the future considering that Ford’s market cap was much smaller than Tesla’s market cap.
Additionally, Ford’s flagship vehicle, the F-150 Lightning, an all-electric pickup truck that has already debuted in 2022 is having a profound impact on the company’s EV race.
Will Ford succeed? Probably.
That said, in this article, we compare Ford and Tesla’s stocks in several areas, including revenue per vehicle, vehicle profit and margins.
Let’s get started!
Please use the table of contents to navigate this page.
Table Of Contents
Definitions And Overview
Revenue
A1. Revenue Per Car
Profit
B1. Profit Per Car
Margin
C1. Vehicle Margin
Consolidated Margin
D1. Operating Margin
Conclusion And Reference
S1. Conclusion
S2. References and Credits
S3. Disclosure
Definitions
To help readers understand the content better, the following terms and glossaries have been provided.
Revenue Per Car: Revenue Per Car is defined as automotive revenue excluding leasing, regulatory credits, non-automotive segments, etc., divided by vehicle sales.
Revenue Per Car = Automotive Revenue / Vehicle Sales
Vehicle sales represent vehicle wholesale in the case of Ford Motor and vehicle retail volume excluding leasing in the case of Tesla.
Profit Per Car: Profit Per Car is defined as automotive gross profit divided by vehicle sales
Profit Per Car = Automotive Gross Profit / Vehicle Sales
Vehicle sales represent vehicle wholesale in the case of Ford Motor and vehicle retail volume excluding leasing in the case of Tesla.
Vehicle Margin: Vehicle margin is defined as automotive gross profit as a ratio of automotive revenue.
Vehicle Margin = Automotive Gross Profit / Automotive Revenue
Automotive revenue represents car sales revenue excluding Ford Credit in the case of Ford Motor and leasing, regulatory credits, and energy in the case of Tesla.
Operating Margin: Operating margin is a financial metric that measures a company’s efficiency in generating profit from its operations.
It is expressed as a percentage and is calculated by dividing operating income (also known as operating profit) by net sales (revenue).
Operating Margin = Operating Income / Total Net Revenue
Essentially, operating margin shows what percentage of revenue is left over after paying for variable costs of production, such as wages and raw materials.
It’s a key indicator of a company’s financial health and its ability to manage its operations effectively. The higher the operating margin, the more profitable the company is considered to be.
Revenue Per Car
ford-vs-tesla-in-revenue-per-car
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The definition of revenue per car is available here: revenue per car.
Tesla earns slightly higher revenue per car than Ford does, as depicted in the chart above.
In fiscal year 2023, Tesla’s revenue per car was $45,200 while Ford earned just $37,600 in revenue per vehicle, roughly $8,000 difference or 18% higher for Tesla.
However, on the long run, Tesla’s revenue per car has been on the decline, reaching #45,200 in fiscal year 2023, the lowest figure ever measured since 2017.
On the other hand, Ford’s revenue per vehicle has been on the rise, topping nearly $38,000 as of fiscal year 2023, the higest figure ever reported over the last seven years.
Ford’s revenue per car has risen from $20,000 in 2017 to $38,000 in 2023, while Tesla’s figure has decreased from $80,000 to $45,000 during the same period.
Profit Per Car
ford-vs-tesla-in-profit-per-vehicle
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The definition of profit per car is available here: profit per car. Profit per car for both companies is evaluated based on the automotive gross profit.
That said, Tesla earns significantly higher profit per vehicle than Ford does, as shown in the chart above.
Tesla’s profit per vehicle has averaged $11,700 over the last three years versus Ford’s $3,300 during the same period.
A significant trend is that Ford’s profit per car has been relatively stable and has steadily risen, topping $3,500 as of 2023, the highest number ever measured.
On the other hand, Tesla’s profit per car has declined over time, reaching just $7,700 in fiscal year 2023, the lowest profit ever achieved since 2017.
Vehicle Margin
ford-vs-tesla-in-vehicle-margin
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The definition of vehicle margin is available here: vehicle margin. Vehicle margin for both companies is evaluated based on the automotive gross profit margin.
Tesla’s vehicle margin was double the figure of Ford. In fact, it was tripple the value of Ford in fiscal year 2021 and 2022, as shown in the chart above.
As of fiscal year 2023, Tesla’s vehicle margin was 17% versus Ford’s 9.3%.
Again, Ford’s vehicle margin has remained relatively stable since 2021, averaging around 9%, while Tesla’s figure tumbled to 17% in fiscal year 2023, which was last seen in 2019.
Operating Profit Margin
Ford vs Tesla in operating profit margin
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The definition of operating margin is available here: operating margin.
Similarly, Tesla generates much higher operating margin than Ford Motor, as shown in the chart above.
Tesla’s operating margin was 9.2% in fiscal year 2023 compared to Ford’s 3.1%. Since 2021, Tesla’s operating margin has averaged 13%, while Ford’s figure has come in at just 3.5%, only about one-third of Tesla’s figure.
Therefore, from an operational perspective, Tesla is much more profitable than Ford Motor.
Summary
In summary, Tesla is far superior to Ford in terms of margins and profitability. However, Ford’s vehicle pricings are cheaper than Tesla’s.
References and Credits
1. All financial figures in this article are obtained and referenced from Ford Motor and Tesla’s earnings reports, financial statements, SEC filings, etc., which are available in:
i) Ford Earnings Releases, and
ii) Tesla SEC filings.
2. Featured images in this article are used under Creative Common licenses and obtained from the following source: charging an EV and EV charging station.
Disclosure
References and examples such as tables, charts, and diagrams are constantly reviewed to avoid errors, but we cannot warrant the full correctness of all content.
The content in this article is for informational purposes only and is neither a recommendation nor a piece of financial advice to purchase a stock.
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