Ford CEO denies plans to spin off electric vehicle business

UPDATE, February 24, 2022: Jim Farley has unequivocally denied rumours of Ford splitting its electric vehicle and internal combustion engine businesses, as the CEO seeks to clarify the situation.

After reports emerged the Blue Oval was looking to separate its EV and ICE businesses moving forward (more further below), Ford's CEO has now said the only way it can beat its rivals is to offer diversity.

"We have no plans to spin off our electric business or our ICE business," said Farley, as reported by Reuters.

"We know our competition is Nio and Tesla, and we have to beat them, not match them.

"And we also have to beat the best of the ICE players."

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The story to here

February 22, 2022: Ford is reportedly weighing up its options for a split between its electric vehicle operations and legacy internal combustion brand, as the carmaker sets its sights on Tesla-like stock figures.

Citing sources said to be internal company figures familiar with the discussions, Bloomberg reports CEO Jim Farley has considered the idea of spinning off either Ford’s EV or ICE vehicles into their own brand, which would allow the rapidly growing electric segment to stand on its own for greater appeal to investors.

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Ford has hosed down speculation of a full split in a statement. “We’re focused on carrying out our Ford+ plan to transform the company and thrive in this new era of electric and connected vehicles,” Ford said in a statement to Bloomberg.

“We have no plans to spin off our battery electric-vehicle business or our traditional ICE business.”

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However, comments by Farley in an earnings call just weeks ago suggest some sort of division is on the cards, likely an internal walling-off of EV production.

“The customers are different; we think the go-to-market is going to have to be different, the kind of products we develop are different, the procurement supply chain is all different, the talent is different, the level of in-sourcing is different,” Farley said.

“Running a successful ICE business and a successful BEV business are not the same. I’m really excited about the company’s commitment to operate the businesses as they should be.”

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Bloomberg’s sources also told the outlet that the Ford family would be hard to convince on the creation of a full spin-off brand, making an internal division the more likely path in the near future.

Ford has announced it will sink US$30 billion (AU$41.7b) into EV development and production by 2025, and plans to increase annual EV production to 600,000 units by the end of next year. The brand expects battery-powered vehicles to make up half of its sales by 2030.