Tesla Inc (NASDAQ: TSLA) deserves credit for building an "iconic brand" for electrification and investors have reason to be optimistic, former Ford (NYSE: F) president and CEO Mark Fields said Tuesday on CNBC.
Tesla investors are in a position where they can "stand back" and take advantage of favorable trends, Fields said. These include broader growth in electric vehicles, but company-specific catalysts like ramping production in China, and a focus on Europe.
But the key question moving forward which remains unanswered is if Tesla can transition to become a mass manufacturer and if it can be consistently profitable, he said.
Fields served as CEO of Ford from 2014-2017. The stock's share fell from the $17 area to under $12 by the end of his tenure.
Why It's Important For Tesla, Autos
Part of Tesla's competitive advantage that falls under the radar is its software, which Fields said stands years ahead of its rivals. In fact, competitors are even acknowledging their weaknesses internally. For example, Volkswagen executives said in an internal meeting it's far behind in software for its ID.3 electric cars.
The future of automotive remains autonomous although the specific timeline may have changed, Fields said. Once this becomes a reality, Tesla could also hold a key advantage over its competitors as its cars on the road today are constantly collecting data.
Tesla's stock trades around $542 per share with a market cap of about $98 billion. Ford's stock trades around $9.18 per share with a market cap of about $36.5 billion.