On December 28, local time, Ford Motor's market value surpassed GM's for the first time since 2016.
At the close of the day, Ford Motor's stock price was $20.76, with a market value of $83 billion; General Motors' stock price was $57.11, with a market value of $82.9 billion.
However, this transcendence did not last long. As of the close of the U.S. stock market on December 29, local time, Ford's total market value was $82.163 billion, while GM's total market value was $83.090 billion.
In October 2020, Jim Farley became CEO of Ford and promised to accelerate the company's move into electric vehicles. Since then, Ford's auto stock price has risen all the way.
In May 2021, Ford motor unveiled its Ford+ growth plan at the Capital Markets Day event, which will achieve growth in customer relations and electrification and intelligent networking services. According to the plan, by the end of 2025, the company will invest more than $30 billion in electrification businesses, including battery development, while improving efficiency from Ford's flexible electric vehicle architecture and modular technology. By 2030, pure electric vehicles are expected to account for 40% of Ford's global sales.
In September of the same year, Ford announced that it and South Korean battery manufacturer SK Innovation would spend $11.4 billion to build a giant park and battery production base integrating battery cell and vehicle production links in Tennessee and Kentucky, USA, for the manufacture of the next generation of F-series pure electric pickup trucks, and the next generation of Ford and Lincoln pure electric vehicle models needed cells and battery packs, with an annual production capacity of 129GWh.
In terms of intelligence, Ford Motor will expand the scale of Ford and Lincoln brand vehicles equipped with in-flight software upgrades (OTAs), Ford BlueCruise advanced driver assistance technology, in-vehicle ecosystems, and improve the user's car purchase and maintenance experience through digital tools and intelligent network data. The company expects the market size of intelligent network-related services to reach $20 billion by 2030.
Ford's electric models also performed well once they were released: in the U.S., the Mustang Mach-E jumped to second place in the U.S. pure electric SUV segment seven months after launch, and the F-150 Lightning electric pickup has received 120,000 pre-orders since its launch in May, and demand has outstripped supply.
At the same time, Ford Motor's net income, adjusted EBITDA, operating cash flow and adjusted free cash flow all increased in the third quarter of 2021 as chip supply and automotive wholesale sales increased significantly compared to the second quarter. Based on the company's performance, Ford raised its full-year 2021 adjusted EBITDA forecast to $10.5 billion to $11.5 billion.
The veteran car company's ambitious transformation plans and initial achievements have further boosted investor confidence. Compared to less than $9 a share at the beginning of the year, the company's stock price has doubled today. Morgan Stanley analyst Adam Jonas sees 2021 as the company's breakthrough year, "Ford is convincing the stock market that they have a decent future." Although they may start late in some areas, they are starting to become a quick catch-up. ”
Through transformation efforts, Ford Motor has raised its market value to the same level as General Motors, which is also a traditional American car company, but there is still a huge gap between Tesla, the leader in electric vehicles and a market value of more than $1 trillion. Another electric car company, Rivian, has yet to sell a single car, but its backing to tech giant Amazon has earned it a high market capitalization of nearly $90 billion, similarly higher than Ford.
Ford's electrification transformation has not been smooth, and the pure electric SUV Mustang Mach-E has repeatedly delayed delivery and even recalled due to quality problems. Recently, Ford announced that it will stop selling and recall 2626 Mach-E in the United States, the reason for the recall is that the bolt holes in the rear seat belt buckles of the vehicle are too large, which may reduce the ability to restrain passengers in the event of a collision. In September, Ford recalled 17,692 Mach-Es with inadequate windshield adhesion and 13,544 vehicles with adhesion problems with panoramic glass roofs due to bonding problems. In April of this year, the delivery of the model was delayed due to a malfunction in the Mustang Mach-E's 12V battery. In addition, the chip shortage has also affected the production of this pure electric vehicle, resulting in a delay of several weeks in the delivery time of some scheduled owners.
In the Chinese market, Ford announced a delay in delivery just three days after announcing the launch of the Delivery of the Mustang Mach-E on December 26. According to the official introduction, due to the battery partner of Mustang Mach-E in Xi'an, the emergency suspension of production due to the force majeure factor of the epidemic has led to the delay in the delivery of some vehicles. Eight months have passed since pre-sales began in April 2021, and the delivery of Ford's blockbuster model is still not on track.
However, Ford CEO Jim Farley is still "hesitant" about the company's transformation. In a recent interview with Bloomberg, he said that he is confident that he will surpass General Motors and then Tesla in the sales of electric vehicles in the United States. Ford is expected to become the world's second largest seller of electric vehicles within 2 years, producing 600,000 electric vehicles in 2 years.
For now, Farley, which claims to surpass Tesla, still faces daunting challenges. Compared with Ford's current "stretched" electric vehicle and supporting battery production capacity, Tesla already has a production capacity of 1 million vehicles per year, and the Austin plant and berlin factory are also about to start production. In terms of the U.S. market, Tesla Model 3 and Model Y still rank in the top two in terms of pure electric vehicle sales, accounting for more than 65% of the market share, while Ford's market share is only 10%.
Autotrader analyst Michelle Krebs believes that so far, Tesla has successfully repelled competitors and continues to maintain its dominance in the electric vehicle market, while Ford's pure electric models are not enough to pose enough threat to it in the short term. "The Ford F-150 Lightning, although it will come into production next year, has limited production. Ford limited orders for the car to 200,000 units, but it would take three years to fully digest, and production (for Ford) is still unknown. ”