Ford’s stock market price has seen a bump today after reports came out that CEO Jim Farley and the rest of the leadership at the brand are considering a spin-off EV division. The move would potentially provide an easier way for the market to value each side of the business but at the same time, it seems that we’re quite a ways off from a final decision.
The report comes from Bloomberg where they say that insiders at Ford have confirmed ongoing talks about the future of the brand. Among the options are remaining as a singular company, splitting off the EV-section of the automaker into a new entity, or perhaps even separating the internal combustion sector under a new name.
For what it’s worth, Jim Farley himself told Bloomberg, “We are focused on our Ford+ plan to transform the company and thrive in this new era of electric and connected vehicles. We have no plans to spin off our battery electric-vehicle business or our traditional ICE business.” So while that sounds like a quick and firm denial, he also clarified the difference between the two sides of the business.
Related: Ford Hires Former Tesla Engineering Director Alan Clarke
“Running a successful ICE business and a successful BEV business are not the same,” Farley said. “I’m really excited about the company’s commitment to operate the businesses as they should be.”
It’s clear that each side of the equation will require some very specialized research and development so a split doesn’t sound totally wild. Ford has also been doing everything they can to ramp up production after being inundated with EV orders.
It could potentially open up room for a more accurate evaluation of the EV side of Ford’s business model. While Tesla has seen a big boom in value, Ford and GM haven’t enjoyed the same stock surge. If Ford had a dedicated EV division, it might get that treatment without hitting the traditional business very hard.
Bloomberg also reports that the three members of the Ford family that are on the board could be a roadblock to the plan. They also say that it’s plausible that Ford splits the production internally and keeps everything under one name. Only time will tell. Do you think Ford should create a new brand?
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