Ford CEO Questions Tesla’s Approach to Autonomy, Challenges Valuation
AI-summarised brief · reviewed before publication
Ford Motor Co CEO Jim Farley recently spoke at the Aspen Ideas Festival, where he questioned Tesla Inc's approach to autonomy and challenged the logic behind betting on it. Farley expressed that Alphabet Inc's Waymo's lidar-based system makes more sense than Tesla's camera-only model, citing consumer trust and safety. In his speech, Farley highlighted the importance of safety in autonomous driving, stating that lidar is a safety non-negotiable. He also revealed that Ford gave up chasing Level 4 autonomy and instead is focused on "eyes-off" highway driving, which is a more realistic goal. Farley's comments have sparked a broader discussion about Tesla's valuation, which is pricing in a robotaxi revolution that hasn't yet materialized. Tesla trades at a forward P/E nearly 9x Alphabet's, and over 24x Ford's, yet the revenue impact from autonomy remains negligible. Tesla bulls argue that the robotaxi future justifies the premium, but if even legacy automakers like Ford are backing off full autonomy, that future may be farther out than markets want to admit. Waymo, on the other hand, logs over 250,000 paid rides a week, operates commercially, and doesn't carry Tesla's pricing risk. Furthermore, Alphabet's core business still trades at less than 20x forward earnings. Farley's comments have thrown cold water on Tesla's valuation story, suggesting that Alphabet may be the real value winner in the autonomous driving space. Robotaxis might be the future, but for now, Alphabet offers the smarter, cheaper, and more grounded ride.