Ford splits business into separate EV and combustion units

The new Model E division is modeled after EV-only manufacturers.

Andrew Tarantola/Engadget

Ford is determined to compete against electric vehicle rivals like Tesla and Rivian, and it's willing to reorganize the company to improve its chances. The brand is splitting its car manufacturing business into separate EV-only and internal combustion engine (ICE) divisions to help it fight both "new EV competitors" and conventional challengers. The electric unit, Model e, is meant to speed up large-scale development of EVs while producing connected vehicle technology for all of Ford. Effectively, the badge hopes to edge closer to the fast-moving, tech-driven cultures of its EV-only competitors.

The ICE division, Ford Blue, will concentrate on "relentlessly attacking" costs, improving quality and streamlining operations to help turn a profit. Blue will supply hardware-focused engineering and manufacturing to the rest of the company.

Company chief Jim Farley will serve as president of Model e. Apple and Tesla veteran Doug Field, who joined Ford in September 2021, will lead the unit's development as its Chief EV and Digital Systems Officer.

The split, part of a larger Ford+ strategy, isn't a complete surprise. Ford EVs like the Mustang Mach-E and F-150 Lightning have seen strong early demand, but Tesla still dominates the US electric market with deliveries of over 1 million cars last year. The move theoretically helps Ford catch up to or surpass Tesla while keeping ICE cars viable — at least, until ICE is phased out.

This approach also mirrors EV-focused strategy changes at some of Ford's mainstream competitors. GM already plans to become EV-only by 2035, while Stellantis unveiled a "Dare Forward" plan that will see EVs lead sales in Europe and the US by 2030. Even Hyundai was rumored to have stopped developing new combustion engines, although it denied the claim. Electric cars are taking priority across the industry, and Ford doesn't want to risk being left behind.