Ford’s EV Plan Provides Insight into Legacy OEMs
Ford’s Plus Plan - A Legacy OEM’s Transition Plan to EVs
Interesting announcement from Ford.
After denying a separate EV spin-off brand, Ford Motor Company has announced that they will separate business units for its EVs and ICEs.
As part of their Ford+ Plan, there will be 3 main divisions 1) Ford Blue (ICE) 2) Ford Model e (EV) and 3) Ford Pro (commercial vehicles).
To the consumer, the brand and nameplate brands will stay the same. Ford Blue and Model e are designed as separate internal business units to streamline operations towards both Ford's EVs and ICEs.
A few things that this signals to me:
1) Ford continues to show that it's serious about EVs. This isn't just a PR or Marketing ploy. Ford is seriously invested in electric vehicles. You don't change your business structure and invest heavily if it's just an image play.
2) Ford believes that ICEs (i.e. gas cars) aren't going away. In reality, the high profit margins from ICE models help fund the R&D for future EVs. A bit ironic I suppose, but it's reality given that EVs are much more expensive to design and build. Ford also recognizes that some consumers aren't ready to make the full leap to EVs, yet. But could Ford also be signaling a similar strategy as Toyota - that going all-EV like some other brands, isn't the long term answer?
3) Ford wants Startup nimbleness and creativity. While watching successful and up-and-coming EV startups, like Tesla, Rivian, and Lucid Motors, to name a few, Ford realizes that it's difficult to innovate quickly in such a large corporation with over 100 years of history. To win at the EV game, Ford (like all big companies) needs to be quick and innovative like the startups. Many large companies have tried similar approaches by creating internal entrepreneurial teams with mixed results.
4) Ford is looking beyond just the EV. Similar to Tesla and some other startups, Ford is looking at the car as a platform for future technology and connectivity. In the long run, an "EV" is just a powertrain, but opens the gates to future technologies and consumer experiences.
The one thing that Jim Farley eluded to that is true about the auto industry - it's at a pivot point for disruption and change, and legacy OEMs like Ford need to change now.