Ford Has Split Its Business in Half

Ford recently announced it would be splitting into two to dedicate a division to the production of EVs to cater to their increasing EV market.
Written by Serena Aburahma
Reviewed by Kathleen Flear
Jun 16, 2022
Rumors had been swirling for months that
Ford
planned to split its business in half to make room for a second company dedicated to manufacturing electric vehicles. 
Ford recently confirmed the rumors to be true after it announced that it would have two divisions, Blue for gas-powered vehicles and Model E, to cater to its fast-growing
EV market
.

A look into the Ford Model E division

Ford has for years enjoyed success with its
Model T
, which reshaped the 20th Century. 
The automaker has introduced the Model E, which is part of its groundbreaking plan to bridge the gap between its gas-powered past and its battery-powered future by undertaking a significant restructuring of the business.
According to
Ford
, the new EV division will have access to the manufacturer's high-volume manufacturing capabilities, including the speed of a startup at the leading edge of technology.
Part of that involves creating innovations and products to cater to the EV industry, especially charging platforms, electric motors, and batteries.
What's more, the team working in the new division will be responsible for developing user experience and software platforms for all vehicles that the automaker puts out, regardless of which division it is.
The car manufacturer announced that the division for the Model E will create a new way of shopping for a Ford car calling it "simple, intuitive ecommerce platforms, transparent pricing and personalized customer support."
According to
NPR
, the manufacturer had planned to produce 600,000 EVs every year by 2023, with the Blue Oval division announcing EV production will be capped at 2 million per year by 2026.
While that is a significant production jump, Ford's investment proves they might be able to pull it off. The company is slated to invest $5 billion in battery-powered vehicle production and plans for half its volume by 2030 to be EVs.

Ford has its foot firm on the gas-powered division

Electric vehicles are great and all, but some people still want their trucks to stay the same, and it seems Ford CEO Jim Farley agrees. 
Although the company has witnessed a strong demand for its electric offerings, it still has made huge profits from traditional gas-powered vehicles. Unlike most companies in the market, Ford is not committing to entirely phasing out gas-powered cars.
As NPR reports, Farley said that turning some trucks and SUVs into electric vehicles won't be a good fit. Farley reasoned that while the volume of
gas-powered cars
is declining, there might be a revolution in the future regarding internal combustion engines.
While the automaker isn't planning on shying away from investing in gas-powered vehicles, Farley notes that it will only be in some segments such as trucks. 

Ford's split is meant to make profits for the company

According to
Motor1
, the automaker is splitting into two halves to boost profit margins. 
The company noted that Ford Blue will be the company's profit engine in "delivering the lifeblood to fund our future." From these statements, it seems Ford plans to use profits made from the Blue division to find their EV production for now. 
For years, some analysts had pushed Ford to create an entirely separate company for the EV division. According to the analysts, the new company would be a future-focused growth-oriented one that would be in direct competition with Tesla in trading stock. 
However,
Ford’s CEO
wasn't in agreement, noting that it wouldn't make sense at this time. Still, if the Model E division picks up pace as planned, it leaves Ford poised to make it to the forefront of the electrified market.

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