Ford May Spin Off Electric Vehicle Production To Better Compete with Tesla and Other EV Makers
In an effort to match up with “pure EV players” such as Tesla, Ford is reportedly considering spinning off its electric vehicle (EV) unit from the legacy business, according to Bloomberg.
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A spinoff could generate similar earnings Tesla has enjoyed, with a market value approaching $1 trillion, according to Bloomberg.
The latest report made Ford stock jump on Feb. 18, The Street reported.
“We are focused on our Ford+ plan to transform the company and thrive in this new era of electric and connected vehicles,” Ford told Bloomberg when asked about a potential spinoff. “We have no plans to spin off our battery electric-vehicle business or our traditional ICE business.”
Ford’s Mustang Mach-E was also Consumer Reports’ “Top Pick” for an EV in 2022, replacing the Tesla Model 3, as was announced on Feb. 17.
“The Mach-E crossover is wrapped in Mustang heritage and executed with the detail associated with a century-old automaker. We took instant notice, and so did car buyers. As a result, the Mustang Mach-E effectively bumped Tesla from the 10 Top Picks list this year,” according to Consumer Reports.
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During an investor earnings call earlier this month, CEO Jim Farley said that the company is “building new muscles, and that certainly includes scaling up our production of electric vehicles, as I mentioned. We under-called the demand for our first wave of EVs. The Mustang Mach-E, the E-Transit, the F-150 Lightning,” according to a transcript of the call.
In the past six months, the company said it doubled its 2023 planned capacity for EVs to 600,000 units a year, Farley added.
“In the coming months, we’ll break ground on the BlueOval City electric truck plant in Tennessee. It will be the largest, the most advanced manufacturing complex in our history, and it will produce Ford’s second generation of a full-sized electric pickup in high volumes starting in 2025. And at the same time, we have three large-scale battery plants in Tennessee and Kentucky, which will be coming on stream with capacity to produce enough battery cells for more than 1 million vehicles a year,” he said.
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In September, Ford Motor and South Korean battery supplier SK Innovation announced plans to invest $11.4 billion and create 11,000 new jobs for the production of new EVs and advanced lithium-ion batteries. Deemed “the largest ever U.S. investment in electric vehicles at one time by any automotive manufacturer,” the venture will begin in 2025, as GOBankingRates previously reported.
An all-new $5.6 billion mega campus in Stanton, Tennessee called Blue Oval City will create 6,000 new jobs and produce next-generation electric F-Series pickups and advanced batteries.
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