Ford splits its focus

Spring is upon us, which means it’s time to clean out those closets. And Ford is doing some spring cleaning of its own: The company announced it's undertaking a massive overhaul of how it does business, splitting its electric and internal combustion vehicles across two divisions. Large corporations, they’re just like us.

Ford’s reorganization is the biggest in its 118-year history. The company that created the Model T has been through some big shifts in its century-plus. But the move announced yesterday is a whole other ballgame.

• Ford will be split into two divisions: The EV unit will be called Ford Model e, and Ford Blue will “build out the company’s iconic portfolio of ICE vehicles.” (ICE is “internal combustion engine” for the non-car people among us.)
• The company said the plan, dubbed Ford+, will allow it to build 2 million EVs by 2026 and ensure that 50% of the vehicles it sells in 2030 will be electric.
• The two divisions will be run separately, but the company said they would “also support each other.”
• Ford said it chose to go this route after seeing the success of developing the Mustang Mach-E, GT and F-150 Lightning coupled with its dedicated EV division in China.

The move is about more than electric vs. gas-powered vehicles. Cars have always been pieces of hardware.

• But while Ford Blue will continue the industrial side of that hardware production, Ford Model e will be focused on improving the technology.
• The company said it would be responsible for building “key technologies and capabilities — such as EV platforms, batteries, e-motors, inverters, charging and recycling.”

In other words, the meat (fake, of course) and potatoes of Ford Model e’s work is going to be focusing on the technology the company needs to be a viable vehicle business for the rest of the 21st century. In other other words, Model e is basically a tech company inside a car company that will be working on things like the entertainment systems inside the vehicles, as well as the batteries that keep the cars rolling. It will also look at different ways to recycle parts so Ford can move toward a circular economy.

The momentum for EVs is building like never before. Ford’s news is definitely splashy, but it’s hardly all there is on the EV front.

• President Joe Biden praised the company and GM for investing in the EV side of their businesses in his State of the Union address.
• Which of course made Elon Musk big mad.
• The Biden administration also recently announced it was making $5 billion in funding available to states to build out the nation’s EV charging network, care of the bipartisan infrastructure bill.

But whether it’s fast enough to meet the scale of the climate crisis is TBD. The United Nations released a major climate report the same week as Ford’s big news. (Who was trying to upstage who, here?)

• It warns of the massive risks we collectively face if the world fails to rapidly shift away from burning fossil fuels. We don’t need to run through the litany of horrors here, but suffice to say that the stakes are clear as day.

The transportation industry is the biggest source of carbon pollution in the U.S. It also accounts for around a quarter of global carbon pollution, according to the International Energy Agency. Obviously the world needs to clean up every source of carbon dioxide emissions possible, but transportation plays a particularly major role.

Ford’s reorganization crucially doesn’t include a sunset date for when it will stop selling gas-powered vehicles. Nor does it commit Ford Blue to improving fuel economy or manufacturing smaller cars, which would have the benefit of lower emissions and being less likely to kill pedestrians. (Heck, EV trucks are even heavier thanks to the massive batteries they need.) It’s almost as if Ford is saying, “We’re going to ruin the Earth for a few more years, but it’ll be totally worth it.” The company’s reorg alone isn’t going to make or break the climate, but it will help define the shape of the world for decades to come.

— Brian Kahn (email | twitter)

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People are talking

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Making moves

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Google wants workers back in the office next month. It’s the third major tech company to set a back-to-office date after Meta and Microsoft.

China has new rules for pop-up ads and push notifications. The country won’t allow entities without a news information service license to send push notifications about the news, among other regulations.

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