2021 was undoubtedly a brutal year for the global economy, and ongoing supply issues, lockdowns, and the seemingly never ending semiconductor chip shortage played havoc on most major manufacturers' business plans. Despite these challenges, some carmakers managed to post impressive sales numbers, with Toyota becoming the best-selling brand in the US, beating traditional leader GM. This news has been a major blow for American pride, but at least Detroit's finest has something to celebrate: Ford has reached a market value of over $100 billion for the first time in its history.
The surge in Ford's market value comes as more investors jump on the brand's wave of electrification, which includes the Mustang Mach-E, and the star of the moment; the Ford F-150 Lightning.
This past year saw the company double in value, and stock prices rallied by 5.7 percent in afternoon trading yesterday, reaching a peak of $25.87 after which it settled at $25.02 with a closing market cap of $99.9 billion. These record prices have placed Ford ahead of fierce rival GM with a market cap of just under $90 billion, and new kid on the block Rivian, which is currently valued at just over $72 billion.
The consensus is that Ford's push for more EV vehicles is the main reason behind the value surge. Ford CEO Jim Farley's Ford+ turnaround plan is clearly paying off. While Ford celebrates, some have their doubts about the company's ability to maintain these impressive numbers. Morgan Stanley analyst Adam Jonas believes that Ford's risks are quickly catching up with its opportunities, stating that the cyclical nature of the motor industry, and the challenges in scaling its EV production, will hamper further growth.
Despite the naysayers, the fact is that Ford has seen a meteoric rise in value, and looking back, it almost seems unbelievable. On March 23, 2020, during the height of the pandemic, Ford's market value stood at $15.90 billion. That figure rose to $38.91 billion a year ago, and today, Ford is sitting on a 156 percent year-on-year share value growth rate. To put things into perspective, Tesla, Ford's biggest EV rival, has a market cap of over $1 trillion. The EV giant's shares dropped by 4.7 percent on Thursday following the removal of the Cybertruck's 2022 launch date from the model webpage. Farley has pledged to invest over $30 billion into new EVs by 2030, and according to some market experts, will quickly erode Tesla's dominance in the local EV market.