Ford’s aim is that by dividing the company, the two sides will play to their strengths.
Ford is separating its electric car division from its internal combustion engine business in a move that it hopes will encourage investors to value it more highly.
Ford Model E will focus on EVs as well as developing software and connected vehicle services. Meanwhile, Ford Blue will be responsible for all ICE vehicle development with a task to cut costs, simplify operations and improve quality.
- Ford Model E to focus on EVs, Ford Blue on internal combustion cars
- Jim Farley to serve as president of Model E
- Renault, VW and Mercedes-Benz are others who have or will split their business
Commercial vehicles will be covered by the previously established Ford Pro division. Ford said its aim is that by dividing the company, the two sides will play to their strengths. “We’re going all in, creating separate, but complementary businesses,” CEO Jim Farley said in a statement. “That will give us start-up speed and unbridled innovation in Ford Model E together with Ford Blue’s industrial knowhow, volume and iconic brands, like Bronco, that start-ups can only dream about.”
While the two businesses will be separate, both will be owned by Ford and its shareholders with no separate stock market listing, as had been rumoured.
Farley will serve as president of Ford Model E, while Doug Field, currently head of advanced technology and embedded systems, has been named as chief EV and digital systems officer for the division.
Kumar Galhotra, current head of Americas and the International Markets Group, will serve as president of Ford Blue.
Farley has previously stated that the kind of work needed to develop, build and sell an EV is very different from that for an ICE vehicle.
“Running a successful ICE business and the successful BEV business aren’t the same,” he told investors on an earnings call in February. “The customers are different. We think the go-to-market is going to have to be different. The product development process and the kinds of products we develop are different. The procurement supply chains are all different. The talent is different.”
Manufacturers such as Group Renault, Volkswagen Group and Mercedes-Benz have split or are looking to split divisions as they prepare for an electrified future and hive off the ‘legacy’ structures that focus on ICE vehicles.
Ford for India
Ford wound down manufacturing operations in India last year with the carmaker set to look towards bringing in some of its international models as CBU imports. However, the company is also looking to re-commence manufacturing operations in India though this time around for all-electric models. The carmaker is reportedly exploring the possibilities of manufacturing electric vehicles at one of its India plants under the new government PLI scheme.