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• The move will streamline its growing EV business and maximize profits
• 'We’re going all-in’ - Ford CEO Jim Farley
Ford Motor Co (NYSE: F) on Wednesday said it would reorganize its automotive business to separate its electric vehicle and gasoline vehicle operations into different units within the company.
The move will streamline its growing EV business and help the legacy carmaker compete with Tesla Inc (NASDAQ: TSLA), the current market leader in the electric vehicle space.
Shares of Ford jumped nearly 9% at the time of reporting in New York.
The carmaker’s business reorganization plan was previously reported by Bloomberg. The report said Ford is planning new investments of up to $20 billion and considering options to spin-off its EV business.
However, the company is not spinning out any of its businesses at the time, and the Detroit giant has not announced anything about fresh investments.
Bigger picture
Under the reorganization, the two business units are called Ford Blue, overseeing existing and motor future gasoline-powered internal combustion engine (ICE) vehicles, and Ford Model E, which will focus on innovation, connectivity, and EVs.
The carmaker already has a commercial vehicles business unit, which it calls Ford Pro.
The formation of two separate but strategically interdependent auto businesses – Ford Blue and Ford Model e – together with the Ford Pro business, will help the carmaker to fully deploy the Ford+ turnaround plan.
Last May, the carmaker outlined its Ford+ plans, in which the second-biggest U.S. automaker announced strategies to boost growth and value creation and positioning the company to outperform both legacy automakers and new EV competitors.
Ford expects all three businesses will have discrete financial results by 2023, which will give investors greater transparency into the operations.
Picture Credit: FT