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Ford has announced that it will split its company into two separate entities — a “Model e division” featuring its electric fleet as well as a “Blue division” for its legacy line of cars powered by the internal combustion engine.
The Dearborn, Michigan-based automaker said the change will bring about the “formation of two distinct, but strategically interdependent, auto businesses.”
Jim Farley, the chief executive officer of Ford Motor Co., will lead the electric division while retaining his title as CEO.
“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.
“Ford Model e will be Ford’s center of innovation and growth, a team of the world’s best software, electrical and automotive talent turned loose to create truly incredible electric vehicles and digital experiences for new generations of Ford customers,” he said.
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.”
Last fall, Ford announced that it would be investing $11.4 billion in four new US plants — one of which would be used to build electric trucks. The other three would produce batteries for the company’s EV fleet.
Ford said the investment will enable it to produce more than one million electric vehicles a year in the second half of this decade and is part of a commitment to invest at least $30 billion in electric vehicles through 2025.
The company 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.
The four new plants will support the production of electric F-Series trucks, like the new F-150 unveiled earlier this year.
Shares of Ford rose by more than 4.5% in early morning trading on Wall Street on Wednesday.
Ford’s strategy is to boost its share of the emerging EV market as it competes with the likes of Elon Musk’s Tesla and other legacy carmakers like General Motors, which is also investing heavily in its transition to battery-powered vehicles.
“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. Ford also operates an EV division in China.
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