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No EV Spinoff for Ford

CEO Jim Farley says the automaker has no plans to spin off its EV business during a virtual Wolfe Research investor conference.

February 24, 2022
No EV Spinoff for Ford

Chris Farley, CEO, Ford

Credit:

Ford

2 min to read


 

 

As Wall Street analysts speculated that Ford Motor Co. might spin off its electric vehicle (EV) business, CEO Jim Farley put their predictions to rest during a virtual Wolfe Research investor conference.

“We have no plans to spin off our electric or [internal-combustion-engine] business,” he stated.

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He explained Ford’s engineering and manufacturing expertise, and other core capabilities, will be essential in building out the company’s EV business.

Farley stressed Ford will adopt a different approach to developing, building and selling EVs than it takes for gas- and diesel-powered cars, but reiterated that Ford doesn’t need to spin off the EV operations to be successful.

“It’s really [centers] more around focus, capability, expertise and talent,” he said.

Ford shares sold off following Farley’s remarks, down about 2% at close.

Ford’s move to keep EV production in house is similar to other automaker’s strategies. Executives stress they are willing to explore their options, but most say EV operations are tightly intertwined with their total operation.

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“I think all the assets we bring to [the EV transition] are stronger and we can go faster because they’re together,” General Motors Co. CEO Mary Barra said in December.

Still, a Ford electric-vehicle spinoff “could give the new EV division easier access to capital and generate multiples more in-line with pure EV players including Rivian and Tesla,” Duetsche Bank analyst Emmanuel Rosner wrote in a report. He speculated that a complete separation would be difficult to execute.

Ford reported that it expects 40% of its global sales to be electric by 2030.

Originally posted on Auto Dealer Today

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