“We have enough capital,” he said. “We can finance this ourselves.”
Farley himself will lead Ford Model e, a division focused on electric vehicles, technology and software. Kumar Galhotra, president of Ford’s international business unit, will lead Ford Blue, the internal combustion business.
Model E is a game of Ford’s famous Model T, the car that popularized cars in America in the early 20th century. Tesla once wanted to use the Model E name for its own more affordable electric car – the company’s model names would spell SEXY if successful – but Ford presented a legal challenge, thanks to Ford’s long-standing production of the E-Series van. Instead, Tesla eventually named its car the Model 3.
Ford hopes to create two different business cultures in Blue and Model e. Part of the reason, Farley said, is in the hope that software and electric vehicle experts can be attracted to the more entrepreneurial mindset of the individual Model e division. Startups have succeeded in electric vehicles, Ford executives said, attracting people they may have never seen in the automotive industry.
“We want the best people,” said Doug Field, who has been appointed Chief Electric and Digital Officer at Model e. “I don’t care if they come to work on bunny slippers, but we need to have the best people.”
Ford expects half of its sales to be electric vehicles by 2030.
The two divisions will be fed to each other. Model e, for example, will develop software systems that can also be used in Ford gas-powered cars. Meanwhile, Ford Blue will negotiate with suppliers of parts to purchase items that can also be used in electric vehicles, such as suspension or interior elements. Ford Blue will also work to improve the quality of Ford’s “legacy” products, Farley said, and reduce costs. Warranty repair costs, for example, are currently higher than competitors, he said.
Model e will work with suppliers of parts and consumables critical to electric vehicles, such as components for batteries and electric motors. The unit will work deeper into the supply chain, executives said, working with suppliers to find the best components and save costs. Model e will also work on software for buying and buying cars.
Ford expects half of vehicle sales to be electric vehicles by 2030.
The new divisions will begin reporting separate financial results from the first quarter of 2023. Ford’s commercial vehicle division, Ford Pro, will also begin reporting separate financial results at that time.