The automaker said Wednesday, March 2, 2022, that its plan includes two distinct, but strategically interrelated automotive businesses – Ford Blue and Ford Model e.

AP Photo/Keith Srakocic

Ford will split its electric vehicle and internal combustion operations into two individual businesses to accelerate its adaptation to new technologies, and the Detroit automaker said Wednesday its transformation into an electric vehicle business is accelerating.

Ford is planning a major restructuring with two separate but strategically interdependent automotive businesses – Ford Blue focusing on traditional combustion engines and Ford Model e, which will develop electric vehicles.

Jim Farley, chief executive of Ford Motor Co., will lead the electrical division.

“We’re pulling out all the stops, building separate but complementary businesses that give us startup speed and unbridled innovation in Ford Model e along with industry know-how, volume and iconic Ford Blue brands like Bronco, whose start-ups can only dream of,” Farley said.

Two electric vehicle start-ups, Lucid Group and Lordstown Motors, released disappointing production projections this week, highlighting how difficult it is to secure materials and grow in the automotive industry.

Farley said the company recognizes the need to become more nimble on the technology side with so many competitors entering the market.

“Our legacy organization held us back,” Farley said. “We had to change”

But Ford is also competing with electric vehicle juggernaut Tesla and another traditional automaker, General Motors, which promises an even faster transition to electric vehicles. GM went so far as to change its logo, with the “m” in the logo underlined to look more like an electrical outlet.

“Is it a question of winning? 100%,” Farley said. “We want to beat the old players. We want to beat new players.

Ford has already embarked on the development of electric vehicles with the Ford GT, the Mustang Mach-E SUV and the F-150 Lightning pickup. Ford also operates an EV division in China.

On Wednesday, Ford said it now expects half of its vehicles to be electric by 2030. Less than a year ago, the company announced a goal to go 40% electric by then. It also said it will produce more than 2 million electric vehicles per year by 2026, which is about a third of its global volume.

Ford Blue will provide hardware engineering and manufacturing capabilities for the entire company. Ford Model e will develop software and technologies and services for connected vehicles.

Both divisions will be run from Dearborn, Michigan, the automaker’s longtime home. Each will account for their profits and losses individually.

Ford plans to spend $5 billion on electric vehicles this year, including capital expenditures, expenses and direct investments.

Farley, in addition to leading Ford Model e, will continue as CEO of Ford Motor Co. Ford Group Americas and International Markets President Kumar Galhotra will become President of Ford Blue. Galhotra said Ford Blue would be the economic engine that would drive the electric division forward.

Ford shares rose 4% before the opening bell.

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