The ever-popular Ford Motor Company will start doing business under two fresh business entities, one for gas-powered vehicles and one for electric cars. These two groups will act as completely new business units that make financial reports separately from the rest of Ford, but they will not operate as completely different businesses. Shoppers may not notice the difference when visiting a local Ford dealer, but this news is huge.
Ford’s CEO Jim Farley considered completely spinning off the electric vehicle side of the company, but doing so proved to be more complicated than expected. More importantly, there is already enough capital to fund the EV division, so there was no need to sell stock. Not spinning off also means that investors can’t put money towards only one branch of the overall company.
Ford Electric Cars
The EV branch, Ford Model e, will continue to be run by Farley. Ford Blue, the gas-powered branch, will be led by the president of Ford’s International business unit, Kumar Galhotra. The name “Model e” is a play on the infamous Ford model T that essentially started the automotive revolution. The Tesla motor company actually wanted to use this name at one point, but Ford already had rights to it based on its E-series vans.
The hope is that there will be two unique but complementary business cultures. This overall distinction between Blue and Model e will help encourage the entrepreneurial mindset and competitive side of Ford employees. On top of that, Ford hopes to recruit the best and brightest in the industry to the team.
Electric Cars & Gas Powered Collaboration
Even with two different companies inside of Ford, there is still plenty of room for collaboration. The Model e division, for example, is working on software and technology that could easily benefit gas-powered vehicles. At the same time, Ford Blue has a stronger connection with parts suppliers and the overall supply line.
What To Expect At The Dealer
Ford dealer locations across the country expect half of their sales to be electric vehicles before the end of this decade. With the popularity of current EVs like the Ford Mustang Mach-e and Ford F-150 Lightning, there’s no doubt that Ford will be a leader in the electric space in no time. Consumers are looking for more eco-friendly and efficient vehicles, and Ford is delivering.
These two new divisions won’t start reporting their financial statements separately until the first quarter of 2023. This timeline is also when Ford’s commercial division, Ford Pro, will start reporting its own separate financial documents.
It’s hard to say what impact splitting gas-powered, and EV divisions will mean at your local Ford dealer, but all signs point to better automobiles for everyone.
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