Ford’s fork in the road: EV, internal combustion are split

Mar 2, 2022, 5:09 AM | Updated: Mar 4, 2022, 12:46 pm

Ford will split its electric vehicle and internal combustion operations into two individual businesses to accelerate its adaptation of new technology and the Detroit automaker said Wednesday that its transformation into an EV company is accelerating.

Ford plans a major restructuring with two distinct but strategically interdependent auto businesses – Ford Blue focusing on traditional combustion engines and Ford Model e, which will develop electric vehicles.

Jim Farley, the chief executive officer of Ford Motor Co., will lead the electric division. Speaking candidly last week at an investment conference, he said that Ford did not want to completely break off its electric division, but that changes were coming.

“We are going all in, creating separate but complementary businesses that give us start-up speed and unbridled innovation in Ford Model e together with Ford Blue’s industrial know-how, volume and iconic brands like Bronco, that start-ups can only dream about,” Farley said.

The transformation of the auto industry in just the past year in pursuit of EV technology has been astonishing even to advocates who have pushed for years to put gasoline-powered cars in the rearview window. A handful of start-ups have compiled billions in capital, including heavy funding from traditional automakers.

But those upstarts have neither the funding of traditional automakers, which sell millions of cars each year, nor the ability to build at scale.

Lucid Group and Lordstown Motors, newer arrivals, released disappointing production projections this week, highlighting how difficult it is to secure materials and produce vehicles in massive numbers.

Farley said that the company recognized the need to become more nimble on the technology side with so many competitors entering the market.

“Our legacy organization has been holding us back,” Farley said. “We had to change,”

But Ford is also competing with EV heavyweight Tesla, which posted record profits last year, and another traditional automaker, General Motors, which is vowing an even faster transition to electric vehicles. GM went so far as to change its logo, with the ‘m’ in the logo underlined to look more like an electrical plug.

“Is this about winning? 100%,” Farley said. “We want to beat the old players. We want to beat the new players.”

Ford has already charged into the development of electric vehicles with the Ford GT, Mustang Mach-E SUV and F-150 Lightning pickup, and demand is high.

The company has already taken orders for 150,000 electric versions of its F-150 pickup and full production of the vehicle is expected to begin early this year. It’s building three battery plants, one that will also build electric trucks.

In January, GM said it would make the largest investment in company history in its home state of Michigan, spending nearly $7 billion to convert a factory to make electric pickup trucks and to build a new battery cell plant.

On Wednesday, Ford said that it now expects that half of its vehicles will be electric by 2030. Less than a year ago, the company announced a goal of going 40% electric by then. It also said that it will produce more than 2 million electric vehicles annually by 2026, which would represent about a third of its global fleet.

Ford Blue will provide hardware engineering and manufacturing capabilities for the entire company. Ford Model e will develop software and connected vehicle technologies and services.

Both divisions will be run out of Dearborn, Michigan, the automaker’s longtime home. Each will book its profits and losses individually.

Ford anticipates spending $5 billion on electric vehicles this year, including capital expenditures, expense and direct investments.

Farley, in addition to heading Ford Model e, will continue as CEO of Ford Motor Co. The president of Ford’s Americas & International Markets Group, Kumar Galhotra, will become president of Ford Blue. Galhotra said Ford Blue would be the economic engine that would power the electric division forward.

Shares of Ford rose more than 4% before at the opening bell.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

FILE - This Sept. 9, 2012 file photo shows The entrance to the Pine Ridge Indian Reservation in Sou...
Associated Press

Experts: US Court fractures decades of Native American law

A U.S. Supreme Court ruling expanding state authority to prosecute some crimes on Native American land is fracturing decades of law built around the hard-fought principle that tribes have the right to govern themselves on their own territory, legal experts say.
18 hours ago
Associated Press

Top election officials in Arizona county leave amid threats

PHOENIX (AP) — The elected county recorder and the elections director in Arizona’s Yavapai County are resigning after more than a year and a half of threats and heated criticism from backers of former President Donald Trump who accept his lie that he lost the 2020 election because of fraud. County Recorder Leslie Hoffman said […]
18 hours ago
FILE - In this July 24, 2021, file photo former President Donald Trump speaks to supporters at a ga...
Associated Press

Trump social media firm subpoened by feds, stock regulators

NEW YORK (AP) — Donald Trump’s social media company and some of its employees received subpoenas from both a federal grand jury and securities regulators, according to a public disclosure Friday, possibly delaying or even killing a deal promising a cash infusion needed to take on Twitter. Trump Media & Technology Group received subpoenas from […]
18 hours ago
Associated Press

Woman awarded $431,000 for Occupy Wall Street police actions

NEW YORK (AP) — A Manhattan woman was awarded over $400,000 on Friday by a federal jury after suing New York City and its police department, saying she suffered a traumatic brain injury when she was thrown to the ground by a police sergeant while serving as a medic for protesters during 2012 Occupy Wall […]
18 hours ago
Associated Press

Woman awarded $431,000 for Occupy Wall Street police actions

NEW YORK (AP) — A Manhattan woman was awarded over $400,000 on Friday by a federal jury after suing New York City and its police department, saying she suffered a traumatic brain injury when she was thrown to the ground by a police sergeant while serving as a medic for protesters during 2012 Occupy Wall […]
18 hours ago
Associated Press

Prosecutor won’t sue Texas AG Paxton over Jan. 6 records

AUSTIN, Texas (AP) — A prosecutor’s office said Friday that it won’t move forward with a lawsuit against Texas Attorney General Ken Paxton over his refusal to release his communications relating to his appearance at a pro-Donald Trump rally that preceded the deadly riot at the U.S. Capitol last year. The Austin-based Travis County district […]
18 hours ago

Sponsored Articles

...
Carla Berg, MHS, Deputy Director, Public Health Services, Arizona Department of Health Services

Vaccines are safe if you are pregnant or breastfeeding

Are you pregnant? Do you have a friend or loved one who’s expecting?
...
CANVAS ANNUITY

Best retirement savings rates hit 4.30%

Maximize your retirement savings with guaranteed fixed rates up to 4.30%. Did you know there is a financial product that can give you great interest rates as you build your retirement savings and provide you with a paycheck for life once you retire? It might sound too good to be true but it is not; this product is called an annuity.
...
Day & Night Air

Tips to lower your energy bill in the Arizona heat

Does your summer electric bill make you groan? Are you looking for effective ways to reduce your bill?
Ford’s fork in the road: EV, internal combustion are split