Ford sets up new Model e units, hikes EV spending

Ford Motor Co has announced that it will boost spending on electric vehicles to $50 billion, up from the previous $30 billion, through 2026.

Ford is also running its EV unit separately from its legacy combustion engine business, in a bid to topple move industry leader Tesla Inc.

Chief Executive Jim Farley said Ford plans to build more than 2 million EVs in 2026, about one-third of its annual global production, with EVs rising to 50% of its total volume by 2030.

The company does not expect to make a profit on its EV business until the next-generation models begin production in 2025, according to Chief Financial Officer John Lawler.

Although the EV business, named Ford Model e, will be separated from the company’s internal-combustion engine (ICE) unit, Ford Blue, the two divisions will share technology.

The two businesses, along with commercial-vehicle unit Ford Pro, will report separate financial results by 2023.

Doug Field will lead Ford Model e’s product development as chief EV and digital systems officer, and Lisa Drake will head EV industrialization for the unit.

Ford said it hoped to cut structural costs of up to $3 billion in its ICE business, but did not say if that effort would involve reducing head count.

Ford said it expects to spend $5 billion on EVs this year, a two-fold rise over 2021.

Ford is also targeting an adjusted earnings before interest and taxes (EBIT) margin of 10% by 2026 versus 8% it hopes to achieve this year.

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