Ford Restructures, Splits into ICE and EV Units
March 3, 2022—Ford Motor Co. is splitting its automotive operation into two units, doubling down on its efforts to push its electric vehicles.
Announcing the reorganization as part of its "Ford+ Plan" via a news release, officials detailed the creation of two divisions: The Model e Division will focus solely EV development and "build the future as Ford's center of innovation and growth," and the Blue Division will focus on the continuing development of the automaker's ICE offerings.
"Our ambition with Ford+ is to become a truly great, world-changing company again, and that requires focus. 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.”
The two divisions will "run as distinct businesses" but will share resources and support each other, much like how Ford's commercial Pro division has been running up to this point.
Model e, according to the release, will focus on software and innovation as well as electric vehicle development, embracing what the company refers to as a "clean-sheet" approach to vehicle design and production.
"Ford Model e will ... attract and retain the best software, engineering, design and UX talent and perfect new technologies and concepts that can be applied across the Ford enterprise," the release said, "(as well as) develop the key technologies and capabilities – such as EV platforms, batteries, e-motors, inverters, charging and recycling – to create ground-up, breakthrough electric vehicles and ... create the software platforms and fully networked vehicle architectures to support delightful, always-on and ever-improving vehicles and experiences."
Based on the release, Model e seems as though it will serve more as an experimental and tech-heavy branch, whereas Ford Blue will continue to "strengthen the iconic Ford vehicles customers love ... with investments in new models, derivatives, experiences and services."
Ford also plans to boost its Pro and Model e division through Blue's established capability of developing, manufacturing and delivering vehicles on a global scale.
Ford says one of the primary factors in prompting the split was the resounding success the automaker has seen from its teams responsible for the development of the Mustang Mach-E and the F-150 lightning.
“We have made tremendous progress in a short period of time. We have launched a series of hit products globally and demand for our new EVs like F-150 Lightning and Mustang Mach-E is off the charts,” CEO Chris Farley said in the release.
As part of the reorganization, Ford raised its five-year earnings target by 10 percent. The automakers is also planning to produce more than 2 million electric vehicles each year through 2026, which would be about a third of Ford's total annual output.
“This new structure will enhance our capacity to generate industry-leading growth, profitability and liquidity in this new era of transportation,” Ford CFO John Lawler said. “It will sharpen our effectiveness in allocating capital to both the ICE and EV businesses and the returns we expect from them – by making the most of existing capabilities, adding new skills wherever they’re needed, simplifying processes and lowering costs. Most importantly, we believe it will deliver growth and significant value for our stakeholders.”
Image: Ford Motor Co.