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• Ford is considering a partial spinoff of EV operations
• Former top exec of Apple and Tesla leads effort to revamp the carmaker
Ford Motor Co (NYSE: F) is reportedly planning new investments of up to $20 billion to prepare for the electric future and compete with the EV market leader Tesla Inc (NASDAQ: TSLA).
The additional investment of $10 billion to $20 billion will be spread out over the next five to ten years converting its present gasoline-powered cars factories worldwide to electric-vehicle manufacturing plants, Bloomberg News reported on Tuesday, citing people familiar with the plan.
The effort is being led by a former top executive of Apple Inc (NASDAQ: AAPL) and Tesla Doug Field, who joined the 118-year old carmaker in September to steer its advanced technology and embedded systems efforts.
Shares of Ford rose as much as 2.7% on Tuesday after the announcement.
Business reorganization
Ford is also evaluating options to spin off a small portion of its EV business, as part of a reorganization, to capture some of the immense value investors are giving electric startups, a source told Bloomberg.
The report said that the reported move would involve lower-volume models, allowing the carmaker to focus on mass-market EVs.
The new investment will rework Ford’s organizational chart, including hiring an unspecified number of engineers specializing in disciplines relatively new to the company, such as battery chemistry, artificial intelligence, and EV software.
“We are executing our Ford Plus plan to transform the company and thrive in this new era of electric and connected vehicles. We would not comment on speculation,” Mark Truby, chief communications officer at Ford, told Bloomberg in an emailed statement.
EV push and turnaround plan
The reported investment is part of Ford boss Jim Farley’s turnaround plan, who took the helm in October 2020 to take on Tesla’s dominance in EV market space.
Last May, the carmaker outlined its Ford+ plans, in which the second-biggest U.S. automaker announced to spend more than $30 billion on EVs, including battery development, by 2030, up from its prior target of $22 billion.
The new spending plans would be on top of the $30 billion. Since becoming CEO, Farley has accelerated Ford’s EV plans, including tripling the production of its electric Mustang Mach-E and doubling the manufacturing of the F-150 ing electric pickup truck.
Ford also is spending $11.4 billion with South Korea’s SK Innovation to build three battery factories and an EV truck plant in Tennessee and Kentucky.
Investors have bought into Farley’s vision for Ford, briefly lifting the carmaker’s market capitalization $100 billion in January.
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