Ford splits electric cars from gas to operate at ‘startup speed’

Ford Model E is in charge of all things electric cars, including a reworked buying experience

Confirming rumors that have swirled for months, Ford announced that it was splitting into “two distinct, but strategically interdependent, auto businesses” called Ford Blue and Ford Model E. While Ford Blue will manage all of the legacy internal combustion engine vehicles, Ford Model E represents its push into electric vehicles, with products like the Mustang Mach-E and Ford F-150 Lightning.

Former Tesla and Apple executive Doug Field will serve as Ford Model E’s chief EV and digital systems officer. He was hired by Ford last fall after leaving Tesla in 2018 and working on Apple’s Project Titan autonomous electric vehicle for several years. Field is in charge of product creation at Ford Model E, as well as software and embedded systems across both units.

Ford president and CEO Jim Farley will serve as president of the Model E unit also, while Kumar Galhotra, Ford’s president for the Americas and International Markets Group, will be the president of Ford Blue.

Other than product development, the new structure will address another issue with many vaporware EVs — actually selling them to customers. The Model E unit will “lead on creating an exciting new shopping, buying and ownership experience for its future electric vehicle customers that includes simple, intuitive e-commerce platforms, transparent pricing and personalized customer support from Ford ambassadors.”

While Galhotra and Farley told investors that Ford will stick with the franchise model in North America, the company is also planning to have dealers “opt in” to a new setup with the reworked, standardized customer experience and transparent pricing. It also includes something the chip shortage has made car buyers familiar with — no inventory. They didn’t provide specifics on how this will affect commissions and other aspects of the dealer business, even as Farley said dealers should be “ready to specialize.”

Ford Model E is taking a “clean sheet” approach to the design, manufacturing, and delivery of electric cars with “always on” connected experiences in ways that will significantly change how Ford is structured internally and how things work for your local car dealerships.

While EV-dedicated companies like Tesla still dominate sales in the segment, Ford and other legacy automakers are still talking about their big plans to catch up. On Tuesday, Stellantis showed off an image of an electric Jeep while unveiling a “Dare Forward 2030” plan to deliver on electric and software commitments, and GM has said it will invest $35 billion through 2025 to build electric and autonomous vehicles.

The company’s executives described the split as “how we’re going to win as a company” while executing Ford’s plans for its EV push that were originally unveiled last May. The automaker decided against trying to spin off the new EV-only unit as a special acquisitions company (SPAC).

The automaker is also planning to cut $3 billion in costs on its gas-powered side over the next four years, which Farley and Galhotra confirmed will include layoffs, even as Ford Model E puts a high priority on attracting “the best software, engineering, design, and UX talent.” Ford Blue is going to be subject to reductions in “complexity” and “maniacal about reducing costs,” while the company invests $5 billion in EVs in 2022 alone. It will split out the two company’s profits and losses starting next year and is projecting profitability for the electric division within the next four years.