There’s a good argument to be made that legacy automakers that are serious about electrification might do well to spin off their EVs as separate brands. Christiaan Hetzner writes in Fortune that Ford CEO Jim Farley—intentionally or not—made a case for doing just that in a recent earnings call.
When asked whether Ford should separate its legacy ICE vehicles and its EVs, Farley told investors: “I’m struck at how different the rhythm of this digital BEV business is versus ICE. Running a successful ICE business and a successful BEV business is not the same.”
“The customers are different, we think the go-to-market is going to have to be different,” Farley continued. “The kind of products we develop are different, the procurement supply chain is all different, the talent is different, the level of in-sourcing is different.”
Farley noted that the engineering of EVs can be much simpler, which could present an opportunity for higher margins. He also conceded that Ford had been caught by surprise by the huge level of demand for the F-150 Lightning, and had to quickly expand planned production volume, “knocking down walls in our Rouge Electric Vehicle Center while the mortar was still wet.”
Even with the recent expansion, production of the Lightning is constrained by a lack of factory capacity. “If we had full production today to meet our current demand, we would rival the [Tesla] Model Y as the leading BEV nameplate in the US market,” Farley said.
Source: Fortune
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