Photo: Dan Dennis
While Ford transformed the 20th century with their Model T, Tesla reshaped the 21st with their Model 3.
Now, Ford introduced “Model E,” a fraction of Ford’s massive plan to link its gas-powered history and its battery-powered vision via an extensive restructuring of its business.
The automobile manufacturing giant is branching into two separate units: Ford Blue and Ford Model E. The former is for traditional gas and diesel-powered mobiles and the latter for novel electric vehicles. In addition, Ford has already separated a unit for commercial consumers called Ford Pro.
The responses to the company’s restructuring have been buoyant, with stocks climbing up as investors accepted Ford’s adherence to expanding its electric business. “Sometimes two is better than one,” pondered Bank of America, while Jefferies considered it as a “creative move.”
A few analysts urged Ford to offshoot its electric model manufacturing into a separate company. One entity that’s focused on its the future and growth and could trade stock in the valuation that Tesla and other emerging electric vehicle manufacturers are benefiting from.
However, for CEO Jim Farley, the move doesn’t make sense at the moment.
According to Farley, holding the businesses under one corporate umbrella enables them to evenly distribute technology and capital, with Ford Model E reaping benefits from the cash flow and economies of scale of Ford’s traditional business.
On the other hand, Ford Blue gains from the technological improvements that the more software-focused electric models unit is funding.
“Model E will nurture the talent and the culture and the intensity of a high-tech start-up,” said Farley on Wednesday. “Blue will be a profit and cash engine for the entire enterprise.”
Ford has experienced growing demands for its electric models, such as the F-150 Lightning and Mustang Mach E, while remaining to gain massive earnings off traditional gas and diesel-powered offerings, specifically huge trucks.
The giant has made adherence to enormously amplifying its production of electric vehicles. According to Ford, it will develop over 2 million electric models a year by 2026, which will show around a third of the giant’s global production.
Opinions expressed by NY Weekly contributors are their own.
