As part of its global transition to focus on electrification, Ford Motor Company will separate its business into two divisions — one for electric vehicles (EVs) and the other for its internal combustion engine (ICE) vehicles.
Called Ford Blue and Ford Model e, the two distinct but interdependent businesses are designed to position Ford to take advantage of the automotive transformation to electrification as well as cater to those customers wanting gasoline- or diesel-powered vehicles.
The move is different from other automotive OEMs that are fully embracing the transition with plans to sell only EVs by 2040. This would mean phasing out its ICE vehicles completely. Ford said while it would make EVs its primary models of sale, it would not commit to phasing out ICE-based cars completely.
“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,” said Jim Farley, president and CEO of Ford.
Ford said it made the decision to form the Model e division due to the success of the Ford GT, Mustang Mach-E SUV and F-150 Lightning pickup as well as Ford’s dedicated EV division in China.
The divisions will run as distinct businesses, but will support each other as well as Ford Pro, which provides parts and software to vehicles.
This move comes a month after Ford said it would spend about $20 billion on EVs in the coming years. This is in addition to the $22 billion on EVs and autonomous vehicles Ford said it would spend last year. It is unclear if this new spending includes the $11.4 billion commitment to building two mega campuses in Tennessee or twin battery plants in Kentucky to scale EVs.
And while the company plans to sell both ICE and electrified models in the U.S., last year it said it would only sell EVs in the European market by 2030 due to increased demand for these vehicles.
Ford’s move to put more emphasis on electrified models 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.