Ford is Looking Cheap

Ford is, by my estimation, the legacy car maker in the best position to capture EV sales in the future.

I have three basic premises:

1. Ford is likely one of the top two companies in the US in terms of EV positioning, second only to Tesla.
2. EV automotive manufacturing and marketing is still automotive manufacturing and marketing, and Ford is far more experienced and knowledgable on this front than any EV company, including Tesla.
3. Ford is selling as a steep discount (by any metric) to EV startups.

If the above three are correct, I believe one or both of the next two points must be correct:

• Ford is significantly undervalued.
• EV startups and specialists like Tesla are significantly overvalued.

Perhaps most importantly, the second point above must be grossly true in order for the first point to not be true. The market must have wildly inflated the values of other EV companies in order for Ford to not be undervalued.

I'll avoid getting too far into the weeds on earnings and production numbers here, but I'll at least lay out the current market cap of some relevant players:

• Tesla: $839B
• Ford: $64B
• Lucid: $40B
• Rivian: $36B
• GM: $60B

The points I'm making here likely apply just as well to GM, but I'm a bit more bullish on Ford's vision for their EV future. I'm also not trying to turn this into a generalized “Is Tesla overvalued?” thread.

But, it EV manufacturing is not so different from ICE manufacturing that companies with zero experience in the automotive world (like Rivian and Lucid) have an advantage over Ford, which has produced America's best selling vehicle for the last bazillion year, then Ford is coming into this new EV world with better experience and a plan that is, in my estimation, at least as good as Rivian's and Lucid's.

In order to believe Ford is not overvalued, you must believe at least one of the following:

1. Ford sucks so badly at automotive manufacturing and marketing that its experience is a negative contributing factor.
2. EVs are so vastly different from ICE and hybrid vehicles that Rivian's and Lucid's EV-specific natures give them an advantage over Ford.
3. The automotive sector in general is such an unprofitable sector that all of these companies are overvalued, which implies that Tesla is selling for Benjamins on the dollar.

This isn't a true due dilligence report. It's just a few things to think about.