There's a new Ford in town — two, to be exact. The Dearborn, Mich.-based automaker this morning confirmed recent reports that it would split its electric vehicle and internal combustion operations into two separate business units within the company, with "Ford Model e" heading up EV development and "Ford Blue" driving traditional vehicles.
While the move is primarily a reorganization within Ford and is unlikely to yield things like separate external branding or dealerships, it does represent an aggressive plan to prepare for an electric future. The two units "will be run as distinct businesses, but also support each other," as well as the new Ford Pro commercial and fleet division, company officials said in a news release. All are expected to have distinct financial results and profit-and-loss statements by 2023.
Veteran executive Kumar Galhotra will serve as president of Ford Blue, while Doug Field, who joined Ford in 2021 after a career with Apple and Tesla, will head up Ford Model e.
"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," CEO Jim Farley said in a statement with a dig aimed at newcomers who have in recent years drawn considerably bigger valuations than traditional automakers as investors bet on the future.
That's been a big sticking point with Ford's investors in recent years. Shareholders spent much of the late 2010s complaining that the company was ill-prepared for the electric (and possibly autonomous) future, as well as the fact that its valuation was far behind Tesla and other startups. When he took the CEO job in 2020, Farley was tasked with carving a real path to the future for the 118-year-old car company.
As CNBC notes, some investors wanted Ford's EV business to be spun off entirely; this move keeps it in-house but establishes it as something with its own eventual P&L, which should appease at least some shareholders. (In fact, Farley was denying spinoff rumors as recently as last week.)
Meanwhile, Ford Blue sounds like business as more-or-less usual; the division aims to "strengthen the iconic Ford vehicles customers love, such as F-Series, Ranger and Maverick trucks, Bronco and Explorer SUVs, and Mustang, with investments in new models, derivatives, experiences and services," the release said.
Today's news represents one of the biggest moves in Farley's turnaround plan. Ford Blue will be focused on maximizing profits around conventional vehicles, while Ford Model e will be the company's "center of innovation and growth," officials said in a statement. That includes developing and scaling battery tech, poaching talent from startups and creating software platforms for networked cars.
Ford has invested heavily into the electric space in recent years, with the Mustang Mach-E earning significant critical and consumer acclaim and the upcoming Ford F-150 Lightning likely to be the first EV many Americans will own.
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