Ford Separates EV, ICE Vehicle Businesses
Ford announced the separation of its electric vehicle (EV) and internal combustion engine (ICE) businesses as part of its plan to become a leader in the EV market. The move comes at a time when demand for these vehicles is rising in different countries.
Ford unleashed the Ford + Plan to introduce its new organizational structure. The automaker will now have two business units: Ford Model e and Ford Blue. “It will sharpen our effectiveness in allocating capital to both the ICE and EV businesses and the returns we expect from them–by making the most of existing capabilities, adding new skills wherever they are needed, simplifying processes and lowering costs. Most importantly, we believe it will deliver growth and significant value for our stakeholders,” said John Lawler, CFO, Ford.
Ford Model e will focus on the EV business. It will adapt new technologies, design electric products and transform the buying experience by using e-commerce platforms. On the other hand, Ford Blue will strengthen the company’s ICE vehicle business by reducing manufacturing costs and delivering a new customer experience powered by Ford Model e’s software. The automaker's decision comes at a time when the automotive industry is rapidly electrifying and more brands are competing to control the EV market.
According to the International Energy Agency (IEA), electric cars are becoming more competitive in some markets such as Germany. However, in Mexico, the adoption of green vehicles has been a slow but steady effort as the country lacks the necessary incentives to really consider them a viable option, as reported by MBN. The price tag of these units is also an obstacle. Data from the Mexican Association of Automotive Industry (AMIA), shows that between Jan. and Nov., 2021, 42,969 hybrid and electric vehicles were sold in the country, representing 4.7 percent of the sales in this period.
Decision makers are concerned about the low demand of EV in Mexico and want to provide incentives to consumers. For example, during the Open Parliament Forums on Energy Reform, Omar Fayad, Hidalgo’s Governor, proposed modifications to the Law on Income Tax so EV owners could deduct taxes, consequently promoting the commercialization of these vehicles in Mexico. “If we do not look to the future and prepare ourselves to face the automotive industry of the 21st century, we risk losing our current place in the world,” said Fayad