Ford is transforming its worldwide electric car industry

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Ford is transforming its global automotive business by speeding the development and scale-up of ground-breaking electrified and intelligent vehicle technologies.

Ford President and CEO Jim Farley unveiled the Ford+ strategy, describing it as its most significant potential for growth and wealth creation since Henry Ford increased Model T manufacturing. The building of two separate but strategically interdependent auto businesses and the new Ford Pro-business will help Ford realize the full potential of the Ford+ strategy, driving evolution and value innovation and placing Ford to surpass both legacy automakers and new electric car competitors.

"In a short amount of time, we have achieved amazing progress. We have released several successful products internationally, and demand for our new electric vehicles, including the F-150 Lightning and Mustang Mach-E, is out of this world," Farley added. "However, our objective with Ford+ is to re-establish Ford as a great, world-changing corporation, which demands concentration. So we are going all-in, establishing distinct but complementary companies that combine Ford Model's start-up agility and unfettered invention with Ford Blue's industrial know-how, volume, and historic brands like Bronco to create opportunities that start-ups can only dream about."

The shift was precipitated by the recognition that new approaches, talents, and ultimately organizations are required to fully leverage Ford's development and delivery of electric cars and digitally interconnected vehicles and services and totally capitalize on the company's iconic family of internal combustion vehicles.

The success of Ford's small, mission-driven teams that built the Ford GT, Mustang Mach-E SUV, and F-150 Lightning electric truck and Ford's dedicated EV division in China influenced the development of Ford Model e.

"Ford Model e will be the innovation and growth engine of Ford, unleashing the world's top software, electrical, and automotive talent to build remarkable electric vehicles and digital experiences for future generations of Ford consumers," Farley added.

"Ford Blue aims to grow the ICE company more profitably and vibrantly, to enhance our successful and iconic product families, and to increase customer loyalty via amazing service and experiences. It is about leveraging a century of hardware knowledge to assist in constructing the future. This team will be hell-bent on achieving industry-leading quality, eliminating waste throughout the organization, optimizing cash flow, and reducing our industrial footprint."

Ford Model e and Ford Blue will operate independently. Still, they will complement one another – as will Ford Pro, which is dedicated to providing commercial and government customers with a one-stop-shop for a range of conventional and electric vehicles, as well as a comprehensive suite of software, charging, financing, services, and backing for Ford and non-Ford products.

The Ford Model e will include the following features:

  • Attract and retain the finest software, engineering, design, and user experience expertise, as well as polish innovative technologies and concepts for use throughout the Ford company;
  • Adopt a start-from-scratch strategy to developing, launching, and expanding ground-breaking electrified and connected goods and services for retail, commercial, and shared mobility;
  • Develop critical technologies and capabilities – such as electric vehicle platforms, batteries, e-motors, inverters, charging, and recycling – to enable the development of ground-breaking electric cars; and
  • Develop software platforms and fully networked vehicle architectures that enable the development of enjoyable, always-on, and ever-improving cars and experiences.

Ford Model e will also pioneer a new shopping, purchasing, and ownership experience for its future electric car consumers, including accessible, intuitive e-commerce platforms, transparent pricing, and customized customer assistance from Ford ambassadors. Ford Blue will leverage these best practices to enhance the ICE customer experience and provide new levels of connection and delight.

Ford Blue will leverage Ford's extensive automotive knowledge to accomplish the following:

  • Consolidate the legendary Ford products that consumers adore, like the F-Series, Ranger, and Maverick pickup trucks, Bronco and Explorer SUVs, and Mustang, via investments in new models, derivatives, experiences, and services;
  • Assist clients in pursuing their hobbies and living their daily lives with bespoke brand and vehicle experiences ranging from off-roading to performance to family activities, particularly in scenarios requiring ICE capabilities;
  • Deliver innovatively, connected, tailored, and always-on experiences to consumers using the software and embedded technology from Ford Model e;
  • Make Ford's industry-leading quality and unmatched service a cause for customers to choose and remain with the company;
  • Eliminate waste and significantly lower product, production, and quality-control expenses; and
  • Support the Ford Model e and Ford Pro with proven global engineering, purchasing, manufacturing, and vehicle testing and development capabilities that ensure world-class safety, ride and handling, quiet and comfort, and durability.

Ford confirms its projection for corporate adjusted EBITDA of $11.5 billion to $12.5 billion in 2022. The upper end of the range equates to an 8% margin, which would be one year ahead of the company's previous target. In addition, Ford is boosting its longer-term operational, and financial objectives as a result of the adjustments announced today, including:

By 2026, the company expects to achieve an adjusted EBIT margin of 10%, a 270-basis-point gain over 2021 – driven by increased volumes, cost reductions for EVs, and a considerable fall in ICE structural costs of up to $3 billion.

By 2026, Ford will build over 2 million electric cars annually, accounting for about one-third of its worldwide volume, increasing to 50% by 2030, securing the same, if not more, market share in vehicle segments where Ford now dominates.

Additionally, Ford anticipates spending $5 billion on EVs in 2022, including capital expenditures, operating expenses, and direct investments, doubling its spending in 2021.

Ford reaffirmed its goal to carbon neutrality by 2050 and use 100 percent renewable energy in all manufacturing activities by 2035.

"This new structure will enable us to achieve industry-leading growth, profitability, and liquidity in this new era of transportation," Ford Chief Financial Officer John Lawler said. "It will increase our efficacy in allocating capital to both the ICE and EV companies by maximizing current capabilities, adding new talents where needed, streamlining procedures, and reducing costs. But, most significantly, we believe it will result in considerable growth and wealth creation for our stakeholders."

Ford Model e and Ford Blue will operate in tandem with other Ford divisions. Ford Pro will continue to provide commercial clients with industry-leading products, services, and support. Lincoln will continue to offer engaging automobiles with an excellent ownership experience, served by Ford Model e and Ford Blue. Ford Drive will continue to innovate in the area of digitally linked transportation. Additionally, Ford Credit will enhance the customer experience and increase loyalty through a comprehensive portfolio of financial products and services.

Ford is announcing numerous senior appointments in conjunction with Ford Blue and Ford Model, e. Farley will continue to serve as president and CEO of Ford Motor Company in addition to his job as president and CEO of Ford Model e.

Doug Field will manage the development of the Ford Model e as chief electric vehicle and digital systems officer. He will also oversee the development of Ford's software and embedded systems. Marin Gjaja will lead Model e's customer experience, go-to-market, and new business activities.

"Creating genuinely fantastic electric and software-driven cars – with experiences customers cannot fathom – demands a start-from-scratch strategy," Field explained. "We are establishing an organization that leverages all of Ford's expertise and talents but is capable of acting quickly and with an unbridled ambition to produce innovative new products."

Kumar Galhotra will lead Ford Blue as president. "Ford Blue's objective is audacious," Galhotra explained. "We are investing in our legendary F-Series franchise, maximizing the potential of Bronco and Maverick, and introducing new vehicles such as the worldwide Ranger pickup, Ranger Raptor, and Raptor R. We will couple these outstanding goods with a straightforward, connected, and easy consumer experience that fosters greater loyalty. We will be extremely cost-competitive and offer a compelling incentive to select Ford. And by doing so, Ford Blue will become a cash cow and a profit center for the whole firm."

Stuart Rowley and Hau Thai-Tang will assume new global leadership responsibilities to assist Ford's transition.

Rowley will serve as the organization's chief conversion and quality officer. He will establish quality as a basis to buy a Ford and drive Ford's enterprise-wide drive toward increased efficiency, reduced complexity, and a lean, fully competitive cost structure.

Thai-Tang will serve as chief industrial platform officer at Ford. He will be responsible for product development, supply chain management, and production engineering for Ford Blue, Ford Model e, Ford Pro, and Ford Drive ICE products and standard systems.