Ford, (F) - Get Free Report speeding its move into electric vehicles, said on Wednesday that it would split its operations into two separate but complementary divisions, one for its EVs and one for its internal combustion engine cars (ICE) or gasoline cars.
Jim Farley, president and chief executive officer at parent Ford, in addition will serve as president of the electric-vehicle division. Doug Field -- who in September was named to head advanced technology and embedded systems, reporting to Farley -- will lead the electric division's product creation as chief EV and digital systems officer."
Kumar Galhotra, currently president for the Americas and international markets at parent Ford, will serve as president of the gasoline-car unit.
The units -- Ford Model e for EVs and Ford Blue for the traditional cars -- will remain part of the parent.
But by 2023 Ford expects them -- and Ford Pro, which focuses on offering all Ford vehicles and supporting software to business and government customers -- to each issue separate profit-and-loss statements.
With the segments -- EVs, gasoline cars and Ford Pro -- along with Ford Credit, Chief Financial Officer John Lawlor said in a conference call with analysts and investors, Ford now has "the right organizational structure to compete, win, against the very best, both legacy [original equipment manufacturers]" and new startups.
Ford affirmed its financial guidance for 2022. It confirmed that it expects to produce more than 2 million electric vehicles a year by 2026, representing one-third of its global volume. EVs should become half its annual output by 2030.
The company expects to spend $5 billion on EVs in 2022, including capital expenditures, expense and direct investments. That's double the 2021 figure.
The EV unit “will accelerate innovation and delivery of breakthrough electric vehicles at scale, and develop software and connected vehicle technologies and services for all of Ford,” the Dearborn, Mich. Auto giant said in a statement.
The division focused on internal-combustion engines will build out the company’s traditional vehicles and provide “world-class hardware engineering and manufacturing capabilities for all of Ford.”
Ford said that it recognized that "different approaches, talents and, ultimately, organizations were required to" fully realize the potential of its businesses.