Ford to Separate Electric Vehicle and Combustion Engine Businesses

Researched by Industrial Info Resources (Sugar Land, Texas)--Ford Motor Company (NYSE:F) (Dearborn, Michigan) is separating its growing electric vehicle (EV) operations from its internal combustion engine (ICE) business, as the company seeks to scale up EV development.

The new Ford Model e division will ramp up the company's EV offerings, and develop software and connected-vehicle technologies for the entire company. The Ford Blue division will focus on producing traditional vehicles and delivering "new, connected, personalized and always-on experiences for customers powered by Ford Model e's software and embedded systems."

Ford expects to spend $5 billion on EVs in 2022, according to the announcement, including capital expenditures, expenses and direct investments--twice the related spend in 2021.

Although Ford strives to phase out all ICE vehicles by 2030, the reorganization "will sharpen our effectiveness in allocating capital to both the ICE and EV businesses and the returns we expect from them," said Chief Financial Officer John Lawler.

Industrial Info is tracking 18 active projects, worth $13.4 billion, from Ford in the U.S. and Canada.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can click here for a full list of detailed project reports.

Last year, Ford entered into a joint venture with its EV battery supplier, SK Innovation (Seoul, South Korea), to build three EV battery-manufacturing sites and one electric truck assembly plant in the Southeast region. The BlueOval SK Battery Park in Glendale, Kentucky, about 50 miles southeast of Louisville, will provide Ford's North American plants with batteries for its next generation of electric vehicles. The $3.4 billion Phase 1 is expected to begin site preparation in May, with completion in September 2025, and begin production in late 2025. The $2.3 billion Phase 2 is expected to kick off in 2023. Subscribers can see detailed reports on Phase 1 and Phase 2.

The joint venture also expects to build a $2.9 billion EV battery-manufacturing plant and a $2.7 billion electric truck-manufacturing plant in Stanton, Tennessee, about 50 miles outside of Memphis. These projects also are planned to begin site preparation in May and to be completed in 2025. Subscribers can click here for reports on the battery-manufacturing and electric truck projects.

Dave Pickering, Industrial Info's vice president of research for the Industrial Manufacturing Industry, applauds Ford's ambitious efforts in the EV space, but warns the automaker could hit a wall as it moves forward with the shift away from traditional vehicles: "Ford is looking at their fast-growing EV operations for growth, and have pledged to be fully-electric by 2030, but the realist in me sees barriers to mass EV adoption--especially a deficient nationwide charging infrastructure and general lack of consumer interest. Unfortunately, I am expecting Ford's combustion engine business to be more active in the long term than the company would care for."

He also notes EV battery manufacturing will play a vital role in adoption. For more information, see February 7, 2022, article - Automakers Pledge to Electrify Transportation, but Will the Batteries Be There?

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: LinkedIn.