Tesla Gets Some Friendly Advice From Former Ford CEO As Stock Sinks Further

As Tesla Inc. TSLA struggles with a sagging stock price, the electric vehicle maker just got friendly advice from a former executive of a rival automaker.

What Happened: Tesla is first and foremost a battery and technology company that happens to make cars, which is a big advantage, former Ford Motor Co. F CEO Mark Fields said in an interview with CNBC’s Fast Money on Tuesday.

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Despite Tesla having a big first-mover advantage, it is currently facing a lot of challenges, especially on the demand side, he said. The problems in China reflect COVID-19 challenges and the demand per se, he added.

In the U.S., given that Tesla had a 100% market share once, it can only go down, Fields said. The market share erosion is mainly due to a lack of a product to compete in the under $50,000 category and this is going to be a challenge for Tesla, Fields added.

“That is where the growth is going to be going forward as we shift from early adopters to mass adoption,” the former CEO said.

Fields also delved into the CEO situation. There has been widespread criticism from even backers that Tesla CEO Elon Musk’s focus on Twitter has diluted his attention to his EV venture.

According to Fields, the auto industry is a 24/7 job and requires constant attention to teams throughout the world and consideration of ways to increase productivity, product quality and sales. Given Tesla’s size, not every issue comes to the boss, but if it does, it raises the question that who makes decisions for the company if the leader isn't present, he added.

Why It’s Important: Tesla shares have pulled back about 54.3% for the year-to-date, grossly underperforming the broader market. The S&P 500 Index, considered a proxy for the broader market, is down by a more modest 15.7% for the same timeframe.

From Tesla’s all-time high of $414.50 that it hit on Nov. 4, the stock has lost a whopping 61%.

Tesla bull and Future Fund co-founder Gary Black has also expressed a similar opinion, blaming the stock weakness on a lack of sub $30,000 compact car in China, among other things.

Price Action: Tesla closed Tuesday’s session down 4.09%, at $160.95, according to Benzinga Pro data.

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