Ford Motor Company has said it is increasing proposed investment in its electric vehicle to cover 2022 to 2026.
In a Bloomberg interview, Jim Farley, CEO Ford Motor Company said a $50 billion will be invested in the company’s electricity vehicle over the next half-decade from 2021 to 2025.
The new target; expected go toward battery materials and plants, along with the development of new plug-in models, is an upward review from its prior $30 billion plan.
What the CEO is saying
According to the CEO, the earnings from Ford’s internal-combustion-engine operations will be used to fund its electric vehicle adding that the company had explored the possibility of a spinoff before deciding on the current path.
He said, “The funding for that $50 billion is all based on our core automotive operations, that’s why we created a separate group called Ford Blue, because we need them to be more profitable to fund this inside the company.”
Farley also revealed that the 118-year-old company will separate its fast-growing electric vehicle operations from its legacy combustion engine business as the new model e unit scale up the automaker’s EV offerings and develop software and connected-vehicle technology and services for all of the company.
Pointing out that its Ford Blue will focus on combustion vehicles, cutting costs and simplifying operations, he said, “Ford’s ambition will be to become a truly great, world-changing company again, and that requires focus. We are going all in, creating separate but complementary businesses that give us startup speed and unbridled innovation.”
He also added that it plans to be able to make 2 million electric vehicles annually by 2026, a big step up from the 600,000 it’s aiming for in 2024 whilst also targeting adjusted earnings before interest and taxes of 10% by 2026, up from as much as 8% expected for this year.
What you should know
- Last year, Ford said it was investing $30 billion in its electric vehicle future by 2025, up from a previous spend of $22 billion by 2023.
- According to its Hau Thai-Tang, Ford’s chief product platform and operations officer, the investment underscores the company’s belief that production-feasible solid state batteries are within reach in this decade
- The company last year took 72,000 vehicle orders up from 54,000 year on year with majority of the sales being trucks and SUVs.
