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Ford splits into Ford Blue and Ford Model E to focus on its EV strategy

Ford is taking a bold step as it pursues its EV strategy. It will split the company into two.

One of the oldest auto brands in the world, Ford, is about to undergo a huge transformation. The company had been rumored to be splitting into two auto businesses. Ford says the two entities will be strategically interdependent.

From now on, there will be Ford Blue and Ford Model E. The former will continue with legacy ICE vehicles while the latter will take over its EV efforts. Existing electric vehicles like the Mustang Mach-E and Ford F-150 Lightning will now come under Ford Model E.

Heading Ford Model E is Doug Field, a veteran of both Tesla and Apple, where he worked on the long-rumored Apple autonomous car. His title at Ford Model E is chief EV and digital systems officer. While he will oversee product creation at Ford Model E, Field will also make input at Ford Blue because he is responsible for software and embedded systems at the two units.

Ford Model E 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.”

CEO Jim Farley said Ford will not depart from its franchise model of selling vehicles in North America. However, Ford will introduce a new method that is more transparent and uniform. But dealers can choose whether to join the new selling arrangement. The company left out information on how the new way will affect commission in case of no inventory, which has become a possibility, with the persistent chip shortage affecting all carmakers.

Ford says it will start Model E from scratch, just like EV startups. It will open an entirely new book in design, manufacturing, and even delivery. This means it will restructure how the company works internally and even parts of its relationship with its dealers.

Ford is trying to catch up with the market leader, Tesla, set to deliver more than a million EVs this year. But it faces competition from fellow traditional vehicle makers. For example, Stellantis-owned Jeep has shown off its electric SUV due in 2023. Its sister brand Ram also teased the electric version of its Ram 1500.

Similarly, GM has committed to spending $35 billion before the end of 2025 to make more electric vehicles. It already has the Hummer EV delivering to the first batch of preorders. Its Silverado EV is coming next year, but the Cadillac Lyriq would have arrived before then.

But Ford’s top brass is touting this split as the winning formula for carrying out the EV plans it announced last year. The company, however, decided against spinning off the EV side as a publicly-traded company using a special purpose acquisition company (SPAC).

Farley will serve as the president of Model E, while Kumar Galhotra will step in as Ford Blue’s president.

On the Ford Blue side, there will be a $3 billion cut in running costs in the next four years, perhaps signaling that Ford is slowing down with ICE vehicles. It will involve layoffs even though Model E will be attracting more talents in software, engineering, etc., at the same time.

It appears Ford is finally making use of the Model E trademark it got that forced Tesla to choose the name Model 3 for its popular EV model. Elon Musk wanted the name Model E so that his company’s lineup would feature S, E, X, Y.

Written by HackerVibes

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