Photo: Jim Farley
As the world transitions to electric vehicles (EVs), one legacy automaker’s leader is suggesting a shift in business practices to match newer, higher-valued EV companies.
Ford’s CEO Jim Farley is considering ways to separate the company’s EV business from its gas vehicle business, in order to earn investor support and stock benefits like those garnered by Tesla, according to Bloomberg.
Despite Farley’s interest, Ford has acknowledged that splitting the company would be too difficult. In response, Farley may decide to go through a broad reorganization of the company internally to make the EV sector its own unit.
Tesla’s market cap as of February 17 stands at $905 billion, versus $70 billion for Ford.
Ford Now Tweaks Cars Continuously Like Tesla, Slashes Mach-E Costs by $1,000 https://t.co/wPEdci8nKR
— TeslaNorth.com (@RealTeslaNorth) February 8, 2022
In an email, Ford wrote, “We are focused on our Ford+ plan to transform the company and thrive in this new era of electric and connected vehicles.” The email continued, “We have no plans to spin off our battery electric-vehicle business or our traditional ICE business.”
The pressure comes from Wall Street and from companies like Tesla and Rivian — the former which is floating around a $1 trillion market cap and the latter which saw its stock surge to the levels of Ford’s briefly late last year.
Unnamed sources say Ford’s existing structure lacks access to capital and investors, as other EV makers such as Tesla have. But resistance to the plan comes from the controlling Ford family, which has three seats on the company’s board and controlling shares.
Ford plans to spend $30 billion for its EVs through 2025, plus an extra $10 billion by 2030 to covert existing factories to produce electric cars.
After seeing an $8.2 billion gain on its investment into Rivian, Ford would have a hard time not considering how it can be more like new EV automakers, especially amidst the burgeoning of the electric vehicle market worldwide.
