SOTP Valuation: Unlocking Ford's Hidden EV Value vs. Tesla & Rivian
EVsValuationSOTPInvestors often struggle to value legacy automakers like Ford (NYSE: F) using traditional metrics. While the company trades at a low single-digit P/E ratio, this headline number masks a critical divergence within its business. By applying a Sum-of-the-Parts (SOTP) analysis, we can deconstruct Ford into its core components—Ford Blue (ICE), Ford Pro (Commercial), and Ford Model e (EV)—to reveal a valuation picture that suggests the market is significantly discounting its electric potential.
Valuation in Flux: Deconstructing the EV Transition
The automotive sector is undergoing a seismic shift, creating complex valuation challenges for financial analysts. While pure-play electric vehicle companies like Tesla and Rivian are valued on growth potential and technological leadership, legacy automakers such as Ford are a hybrid of a declining, yet cash-generative, internal combustion engine (ICE) business and a high-growth, capital-intensive EV segment. Standard valuation metrics often fail to capture this duality. This report utilizes a sum-of-the-parts (SOTP) framework to dissect Ford's valuation, benchmarking its implied EV segment against its pure-play competitors, based on financial data through fiscal year 2025.
Key Data Insights: Diverging Growth and Profitability Paths
A quantitative review of the financials reveals three distinct operational narratives. Tesla, Inc., the established EV leader, is facing significant headwinds. After posting $97.7 billion in revenue in 2024, its top line contracted by 2.9% to $94.8 billion in 2025. More critically, its operating margin has compressed from a robust 16.8% in 2022 to 4.6% in 2025, with operating income falling from $13.7 billion to just $4.4 billion over the same period.
5-Year Income Statement
TSLA · Tesla, Inc.