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Ford to separate EV and legacy auto business units

Ford said early success of the all-electric F-150 Lighting and Mustang Mach-E drove the decision to split the EV and ICE business units.
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In yet another sign of the changing auto industry, and the growing penetration of electric vehicles, Ford said it will split its EV and internal combustion divisions into two distinct units within the company.

Ford CEO Jim Farley reportedly told media and analysts that the company's legacy business is holding it back.

"We are going all in" on electric vehicles, he said.

Ford announced plans in Sept. 2021 for a massive electric vehicle manufacturing campus in Tennessee, as well as two additional battery facilities in Kentucky, in what the company called the largest investment in the U.S. electric vehicle market at one time by an automaker. (Courtesy: Ford)

Farley has called electric vehicles Ford's greatest opportunity since the Model T. Ford expects electric vehicles to represent 40-50% of its global vehicle volume by 2030.

Early popularity of the electric F-150 Lightning led Ford to double production capacity to 150,000 units per year. Ford said it expects to increase production for the electric Mustang Mach-E to 200,000 units by 2023. The success of both vehicles drove Ford's decision to separate the EV and ICE business units, the company said.

In September 2021, Ford announced plans for an electric vehicle manufacturing campus in Tennessee, as well as two additional battery facilities in Kentucky. The total investment is expected to top $11 billion.

Ford Model e will house the company's electric vehicle interests while Ford Blue will contain the legacy business. The units, while separate, will still support each other and share certain resources.

Doubling up

Ford's focus on electric vehicles may not come as a surprise. Sales of new light-duty plug-in electric vehicles nearly doubled from 308,000 in 2020 to 608,000 in 2021, according to the U.S. Department. of Energy.

By contrast, light-duty vehicle sales increased by 3% year-over-year.

The Biden administration, meanwhile, set a goal of electric vehicles making up 50% of U.S. car sales by 2030.

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