What’s The Ford+ Strategy? What We Know – More Information Coming June 1st

A recent Ford press release told us about an event coming up on June 1st. President and CEO Jim Farley will participate in a fireside chat with technology analyst Toni Sacconaghi at the Alliance Bernstein 38th Annual Strategic Decisions Conference on Wednesday, June 1, 2022, at 10:00 AM (Eastern Time). The topic? How Ford is following its Ford+ Plan to become a leader in “digital electric vehicles.”

What Is Ford+?

It seems like every company these days is offering a “plus” version of their services. Walmart+ gives you delivery and other things. Disney+ gives you access to most of the Disney catalog going back decades. Now, Ford is doing it with Ford+. Like all of the others, Ford’s “plus” is going to be different, because Ford isn’t Disney or Walmart. But, what does that mean?

Focusing on “digital electric vehicles” sounds a lot like GM’s recent focus on “software defined vehicles” I briefly discussed in another article, and I while still think that it’s a bit of a cliched buzz word, the basic idea mainstream manufacturers seem to be Figuring out is that cars need to have better user-facing software to compete in the rest of the 21st Century. This is important, but doesn’t tell us much about what the specifics of Ford+ are.

There is some information online about what this means, including this video by Ford from a couple of months ago (below). In short, it’s Ford’s plan to make the transition to EVs.

To be successful and complete the transition to EVs without going bankrupt (a bigger challenge for the incumbent players in the industry than it sounds like at first), Ford plans on splitting the company into two entities.

One will be called Ford Blue, which will continue to sell gas-powered vehicles like the Ford Mustang and the revived Ford Bronco. While I know there are readers who would rather see Ford just ditch this altogether as soon as possible, these look to be enthusiast cars and utility vehicles that just can’t readily get moved to EV without losing customers. The people buying these aren’t going to buy EVs right now, so selling them an ICE and coming up with money to build more EVs makes sense. It also helps keep customers loyal for when EVs do take over more and those folks are ready to ditch their primitive piles of pistons.

“Ford Blue is going to be the profit engine of Ford, delivering the lifeblood to fund our future.” said Stuart Rowley, Chief Transformation and Quality Officer.

The other side is called Ford Model e (explaining why Elon Musk couldn’t buy that trademark earlier). This side seems to be based on Ford X (a smaller internal effort that produced the Mustang Mach-E), but now set up to scale and become a dominant part of the overall business in the coming years. The idea on this side is to outperform both traditional automakers who aren’t trying that hard at EVs and new EV manufacturers who don’t have Ford’s general automotive expertise that still applies to EVs.

So, we can really think of this as the next phase of Ford treating EVs like a startup, but with the benefit of still being part of an established company that has money coming in from ICE sales. This enables it to spend $5 billion on EVs in 2022, for example.

The goal will be for Ford to make around 1/3 of its total vehicle volume BEVs by 2026, which is a big change in a short time if they can pull it off.

ICE Investment Will Continue

One of the big things, which will be controversial around here, is that Ford does intend to continue investing money in its ICE vehicles and drivetrains. Once again, this may seem insane as the world switches to EVs, but nobody wants to buy a Bronco with 150 miles of range or one that weighs 8000 pounds. Nobody watches Gone in Sixty Seconds (the 2000 film with Nicolas Cage) and wishes Eleanor was a lot quieter. Some cars just won’t translate well to electric.

I love EVs just as much as anyone here, but when I had a chance to take a Ford Mustang GT350R from downtown Los Angeles up into the Angles Crest Highway, I took it. I love the instant torque of an EV, but getting the sound and experience of a manual transmission being pushed by a flat-plane-crank V8 is something that just won’t be the same. I also had a blast playing with Broncos at the Bronco Rodeo near Austin, Texas.

EV and Tesla fans might not get it, but there are many people who will ditch Ford forever if they kill off their iconic brands and vehicles right now or rush customers into EVs. If Ford doesn’t supply these vehicles and use the profits to build out the EV business, someone else will. Plus, as these vehicles become a smaller and smaller part of the Ford business, the impact of the remaining niche enthusiast vehicles will be relatively small. We really need to focus on polluting commuter cars first and not worry about low-volume vehicles like the gas Mustang right now.

If that’s not good enough, that’s OK. Nobody is forcing anyone to buy a Ford, nor is anyone forced to invest in it. If that’s you, just be glad that we shared this information so you could invest or buy elsewhere! We report and give perspectives, then you decide what to do.

Lots Of Cross-Pollination

Another thing that will be important is that these separated businesses will still share technology. Things learned in either business will get shared with the other to make it work better. This means that the Model e side will get plenty of expertise on the non-drivetrain parts of vehicles and manufacturing. That’s a real advantage. This also means that the remaining ICE vehicles will become more EV-like over time, which will make the transition to EV more comfortable for buyers who don’t age out or die out before buying an EV.

More information about the future and details of Ford+ will be coming out on June 1st during the event Ford told us about. If you’d like to learn more, check it out here that morning!

Featured image by Ford.


 


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