Ford splits EV from ICE: ‘this is the destroy Tesla plan’
Ford Motor Company (NYSE: F) shares are up nearly 7.0% on Wednesday after the legacy automaker said its ICE and EV segments will become two distinct businesses within Ford.
Rationale for splitting into distinct electric and gas unitsCopy link to section
The electric unit will go by the name of Model E and the gas one by Ford Blue. CEO Jim Farley expects the restructuring will help scale EVs, strengthen operations, and unlock value with ICE serving as the cash machine and EV bringing growth. He said:
The new EV segment will produce as much excitement as any pure EV competitor, but with scale and resources that no start-up could ever match.
Last month, Ford reported Q4 results that came in shy of Street expectations.
Jim Cramer’s remarks on CNBC’s ‘Squawk on the Street’Copy link to section
Ford is aiming for 10% adjusted operating profit (company-wide) and structural costs lowered by $3.0 billion by 2026.
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Ford also lifted its commitment for investments in EVs from $30 billion to $50 billion by 2026. Doug Field – the former Apple Car and Tesla executive will serve as the chief EV and digital systems officer at Model E. On CNBC’s “Squawk on the Street”, Jim Cramer said:
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This is the destroy Tesla plan. Ford wants to do 20 million EVs by 2026, I think Farley’s ambitions are remarkable. I would take Farley over Musk in 2026. Remember, he’s making money on everything. Farley won’t make something he doesn’t make money on, which is incredible.