Ford Motor Co. (F) said it is separating its electric vehicle (EV) and internal-combustion engine businesses into separate units within the company.
Ford said the move will help to streamline its growing electric vehicle business and maximize profits. It’s a similar strategy to how Ford is operating its “Ford Pro” commercial vehicle business under chief executive Jim Farley’s “Ford+” turnaround strategy.
Separating the operations but keeping them in-house goes halfway to appeasing Wall Street analysts who have been pressuring legacy automakers such as Ford to spin off their electric vehicle operations to capture value that investors have been awarding some EV start-ups.
Going forward, Ford’s electric vehicle business will be called “Ford Model e.” The traditional operations will be known as “Ford Blue.” Ford said they will “operate as distinct businesses but share relevant technology and best practices to leverage scale and drive operating improvements.”
The company plans to breakout financial results for the new units as well as its Ford+ business by 2023, giving investors greater transparency into the operations.
Shares of Ford were up by more than 4% in pre-market trading on news of the company’s reorganization. The stock closed yesterday (March 1) at $16.70 a share, down by 5% on the day. So far this year, Ford stock has declined 23%.