Ford Just Delivered Bad News for Tesla Investors

Ford Motor Company (NYSE: F) scaled back from electric vehicle (EV) models last year, and that was certainly good news for Tesla (NASDAQ: TSLA). However, the company has now announced major news that can bite into one of Tesla's most lucrative markets.

Ford hinted that its vehicles will achieve "point-to-point autonomy" in 2028. The company has Apple executives working on the technology, and it can help Ford enter the robotaxi industry.

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The roads are getting crowded

It's no secret that Tesla is overvalued if you look at it as a car company. The average P/E ratio for automobile stocks is 23.1, and Tesla is doing most of the heavy lifting. It's more common to see automobile stocks with P/E ratios between 5 and 15, and Ford fits in that category.

Tesla shares would have to drop by more than 90% just to have the same valuation as other automakers. The Elon Musk factor has certainly kept the valuation high, but investors have relied on three opportunities to justify the high stock price.

Energy generation is one factor, but that was only up by 13% year over year in Q2. It's a serviceable growth rate, but not when Tesla has a P/E ratio close to 300. The other two opportunities are robotaxis and humanoid robots. While commercialized Optimus units can be a boon for the stock, it depends on competition and demand.

Robotaxis also have the same two variables in play, but Ford's entry in a few years suggests that the roads will get more crowded. If Ford masters the technology for robotaxis, why wouldn't other carmakers like Toyota Motor and Volkswagen get involved? The emergence of more automobile companies creating robotaxi fleets is a feasible risk that will put pressure on Tesla's future margins from that segment.

Tesla has lost market leads in the past

Tesla used to be the defining electric vehicle. Anyone who thought of an EV would instantly think of Tesla. However, research from Edmunds found that Tesla's market share in the U.S. EV industry dropped from nearly 80% in 2019 to 43.9% in 2025.

Investors can easily argue that tariffs on non-U.S. EV makers are the only reason Tesla has the largest U.S. market share in the first place. For instance, Tesla is no longer one of the Top 10 EV brands in China, according to The China Passenger Car Association's ranking. It used to comfortably rank in second place often, only behind BYD, but it has ceded considerable ground. Even on the global stage, BYD has surpassed Tesla in total sales, despite tariffs keeping BYD out of the U.S.

A similar pattern looks to be playing out in the robotaxi opportunity. Ford isn't just sitting around waiting for Tesla to get the entire market share, and other automakers may follow suit. It seems logical that they would work on self-driving technology just as they all gave electric vehicles a try.

Most of those EVs didn't become profitable for traditional automakers, but robotaxis can produce higher margins. If they don't get high margins, it can cast more doubt on Tesla's ability to generate high margins and meaningful growth from its robotaxis.

A lot needs to go right for Tesla

Luckily, the robotaxi industry is a big opportunity. Fortune Business Insights projects a compelling 71.9% CAGR through 2034. Tesla's technology is advanced and already operates in multiple cities. Ford and any other automakers that want to participate in this opportunity have some catching up to do. However, if they eventually catch up, it can put pressure on Tesla's growth rates and profit margins.

Given how high Tesla's valuation is compared to other automakers, there is no room for error. However, Tesla isn't exactly crushing the competition, either. Alphabet's Waymo is in more cities than Tesla's robotaxis. Furthermore, Uber Technologies and Nvidia recently partnered in a plan to launch robotaxis across 28 cities starting next year.

Tesla has a history of ceding market share in key industries and regions. While Tesla is still expected to be a robotaxi winner, the gains may be limited given the current valuation and rising competition. Then, maintaining a P/E ratio close to 300 would come down to humanoid robots.

Tesla needs everything to go right to maintain its current level, and Ford's recent news shows that the situation is far from perfect.

Marc Guberti has positions in Apple. The Motley Fool has positions in and recommends Alphabet, Apple, Nvidia, Tesla, and Uber Technologies. The Motley Fool recommends BYD Company. The Motley Fool has a disclosure policy.