Ford Motors will spend about $20 billion on electric vehicles (EVs) in the coming years as part of the automotive sector’s ongoing transition to electrification.
Last year, Ford said it would spend about $22 billion on EVs and autonomous vehicles and would decrease its gasoline- and diesel-powered models in favor of electrified models by 2030, although it would not completely phase out these engines from its portfolio.
It is presumed that the $20 billion is in addition to the already planned $22 billion the company is spending on the transition. Or if it includes the $11.4 billion commitment Ford made to build two new mega campuses in Tennessee and twin battery plants in Kentucky to scale EVs.
Ford also said it would only sell EVs in the European market by 2030 due to the region’s demand for these vehicles and anticipated demand that will follow the automotive market’s transition.
The Bloomberg report indicates that Ford may be considering a spinoff of some of its EV business to spur more interest and investment in the new cars. The investment will also help with a reorganization of the company and will hire Doug Field to oversee the reorganization. Field was formerly with Apple and Tesla.
The move comes as the automotive industry is undergoing the largest transition in its history as electrification comes to the forefront of the sector. Most, if not all, automotive OEMs are investing heavily in electrification due to consumer interest and rising government and regional mandates to help curb climate change.
At the same time, numerous startups are emerging to challenge traditional players. The popularity of Tesla Motors has also grown the need to accelerate the move to EVs with the hope that these new startups find a role in the market.
Volvo has plans to raise about $2.9 billion via an initial public offering, which it plans to use for EVs. Volkswagen recently upped its investments from $9.1 billion to $21.5 billion through 2023 to spend on both EVs and autonomous vehicles.
Nissan has pledge about $17.6 billion in the next five years to grow its electrification of cars. The overall goal is to roll out about 23 new EVs by 2030, 15 of which will be fully electric.