Ford Motor Co. is considering separating its electric-vehicle operation from its legacy car and truck manufacturing, a move seen boosting its competitiveness against singularly EV-focused makes such as Tesla Inc., according to a Bloomberg News report Friday.
CEO Jim Farley would separate EVs from Ford’s internal combustion engine lines and has even considered spinning off one or the other, people familiar with the effort told Bloomberg.
A spinoff could generate the kind of earnings multiples that have given Tesla
TSLA,
-2.21%
a market value approaching $1 trillion, the article surmised.
But Ford has already said it has no immediate plans for a challenging spinoff. Instead, there could be an internal separation into an EV unit, part of a broader reorganization, the source told the news outlet.
Ford shares
F,
+2.85%
are up more than 3% in morning trading. Though the stock has dropped 13% so far this year, it’s still up nearly 56% from February 2021. The Dow Jones Industrial Average
DJIA,
-0.68%
is up 8.5% over the past year.
Farley took to Twitter late last year to say the auto maker would do “whatever it takes” to become the second largest electric-vehicle maker.
Market tracker LMC Automotive expects EVs to make up 34.2% of new U.S. sales by 2030, with all-electric at 30.1% and plug-in gas/electric hybrids at 4.1%. Sales of EVs, including plug-in hybrids, were only about 4% of total U.S. vehicle sales in 2021. Still, that marked a doubling from just a year earlier.