TSLA vs. F: Which Stock Holds an Upper Hand Post Q3 Earnings?

U.S. legacy automaker Ford F and electric vehicle biggie Tesla TSLA released third-quarter 2025 results last week. While Ford surpassed earnings estimates, Tesla missed the same despite record deliveries. Tesla’s operating income contracted 40% year over year in the last reported quarter amid higher year-over-year SG&A, R&D and restructuring expenses.

Tesla is betting high on autonomous vehicles (AVs) and robotaxis as its next growth frontier. On the latest earnings call, CEO Elon Musk even said that the company plans to move closer to unsupervised autonomy, targeting the removal of safety drivers from robotaxis in much of Austin by year-end. Meanwhile, Ford’s hybrid strategy is likely to gain traction as EV adoption in the United States is set to slow down following the expiration of $7,500 federal EV tax credit incentive at the end of September. Additionally, Ford is taking steps to roll out new affordable EV offerings to match customers’ preferences.

Both auto giants are at pivotal junctures now. Over the past three months, shares of Tesla have gained 33%, while Ford has risen roughly 22%. Let’s compare their growth drivers and challenges to see which stock is currently placed better.

The Case for Tesla

Tesla delivered 497,099 vehicles in the third quarter of 2025, up 7.4% year over year, and set a new quarterly record. However, this surge likely reflected a “pull forward” effect, as buyers rushed to take advantage of the expiring $7,500 federal EV tax credit. Other automakers, including Ford and General Motors, also logged record EV sales from this incentive-driven spike.

The quarter offered Tesla a temporary breather after sales volumes fell for the first two quarters of the year. Demand has been challenged by a maturing lineup, intensifying competition and reduced pricing power. While management highlighted strong operational momentum going forward without providing any specific delivery guidance, it also admitted that margins would remain under pressure from price cuts and higher costs.

One bright spot continues to be Tesla’s Energy Storage segment. The company posted record deployments across residential, industrial and utility markets, fueled by strong demand for its Megapack and Powerwall products. This division is now Tesla’s most profitable, with the highest margins among its businesses.

Another catalyst could be Tesla’s big pivot into artificial intelligence (AI), autonomous driving and robotics. Its robotaxi service, launched in Austin in June, has been expanded to California, Nevada and Arizona. With millions of vehicles already equipped with self-driving hardware, Tesla is positioned to scale quickly once regulations evolve. Musk plans to test robotaxis in 8-10 metro areas by year-end.

Looking ahead, Tesla is focused on new product launches, including the Cybercab, Tesla Semi, and Megapack 3, all slated for 2026. The Optimus humanoid robot is another ambitious project, with a production-intent prototype expected in early 2026. Financially, Tesla remains strong, ending the third quarter with over $41 billion in cash and investments and generating a record $4 billion in free cash flow.

The Case for Ford

Ford's vehicle lineup is strong, led by the F-Series, Maverick pickup and SUVs like the Escape, Explorer, Expedition, Bronco and EcoSport. The F-Series is on track to retain its title as America’s best-selling truck for the 49th consecutive year. Bronco delivered another record quarter in the three months ending September with a segment share above 30%, while Expedition achieved its best third-quarter performance in two decades, driven by strong demand for premium trims such as the Tremor.

Ford dominates the hybrid truck market, holding roughly 70% share, reflecting growing consumer preference for hybrid options amid a slowing EV adoption rate. The company’s Ford Pro division remains a key growth driver. Its integrated model combining vehicles, software and services is fueling higher recurring revenues and stronger margins. Paid software subscriptions continue to expand, boosting aftermarket parts sales and customer retention.

Ford is investing in long-term electrification through its Universal EV Platform, which will underpin digitally advanced, affordable EVs priced around $30,000. The company plans to start installing equipment for UEV production in Louisville and begin LFP battery cell production at its Michigan facility later this year.

Financially, Ford’s position remains solid, ending the third quarter of 2025 with $54 billion in liquidity, including $33 billion in cash. Its dividend yield above 4% offers strong income potential, and management aims to return 40–50% of free cash flow to shareholders.

However, Ford faces near-term challenges from the Novelis aluminum plant fire, which disrupted supply and is expected to cause an EBIT hit of $1.5–$2 billion in the fourth quarter of 2025 and reduce free cash flow by $2-$3 billion. As a result, the company trimmed its 2025 EBIT forecast to $6-$6.5 billion, down from $10.2 billion in 2024 and below its earlier forecast of $6.5-$7.5 billion, reflecting temporary margin pressure.

What Do Estimates Say for F & TSLA

The EPS estimates for Tesla’s current and next year have been revised downward by 5 cents and 3 cents each, respectively, over the past seven days.

While the EPS estimates for Ford’s current year have been revised downward by 2 cents, the same for 2026 have moved north by a cent over the past seven days.

Final Thoughts

Ford and Tesla carry a Zacks Rank #3 (Hold) each, but Ford appears relatively better positioned at this stage. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Despite record Q3 deliveries, Tesla continues to grapple with softening demand (especially in Europe), rising competition from Chinese EV players and policy headwinds. Its ambitious bets on AI, robotaxis and robotics could take years to yield meaningful results, and the company’s history of missed timelines adds execution risk.

While the promise of unsupervised robotaxis remains exciting, it still hinges on successful rollout and regulatory approvals. So, investing in Tesla now will be mostly betting on the company’s high hopes and ambitions.

Ford, meanwhile, faces challenges of its own, including EV losses, recall costs and tariff pressures. Yet it is actively reshaping its EV strategy, strengthening its profitable Ford Pro business, and leveraging a solid balance sheet to support growth and shareholder returns.

The automaker also expects evolving global emissions regulations to ease compliance costs by 2026, allowing better optimization of its ICE, hybrid and EV mix. While the Novelis plant fire poses near-term headwinds, Ford’s diversified portfolio and steady execution make it a relatively stronger bet among the two for now.

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This article originally published on Zacks Investment Research (zacks.com).

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