Ford CEO says no plans to spin off EV business

“We have no plans to spin off our electric or [internal-combustion-engine] business," Mr. Farley said Wednesday during a virtual Wolfe Research investor conference.

Ford shares rose last week following media reports and speculation among Wall Street analysts about the possibility of an EV spinoff.

Mr. Farley said much of Ford’s broader operations will be critical to building out its electric-car business, including its engineering and manufacturing expertise.

Ford shares sold off Wednesday following Mr. Farley’s remarks. They closed down about 2%.

Wall Street analysts in recent years have speculated whether traditional auto makers might separate their electric-car businesses to give investors a more-targeted bet on the industry’s pivot to EVs. Executives generally have said that they are willing to explore their options, but that the electric-vehicle operations are tightly intertwined with the rest of their operations.

“I think all the assets we bring to [the EV transition] are stronger and we can go faster because they’re together," General Motors Co. CEO Mary Barra said during an appearance in December.

The EV-spinoff speculation grew louder last year as EV leader Tesla Inc.’s value soared past $1 trillion, more than the valuation of the five largest global car companies by sales combined. Tesla shares have fallen by more than a quarter this year amid a broader selloff in EV stocks, leaving its market value at around $800 billion.

Some valuations of electric-vehicle startups, including Rivian Automotive and Lucid Group Inc., briefly passed those of GM and Ford in 2021, before falling sharply this year.

A Ford electric-vehicle spinoff “could give the new EV division easier access to capital and generate multiples more in-line with pure EV players including Rivian and Tesla," Deutsche Bank analyst Emmanuel Rosner wrote in a report Tuesday, noting that a complete separation would be difficult to execute.

Like many global auto makers, Ford’s focus and investment have shifted to electric vehicles and digital services, which executives say can generate additional revenue, even though those are small parts of the business today. Ford has said it expects 40% of its global sales to be electric by 2030.

Mr. Farley said Wednesday that Ford will take a different approach to develop, build and sell electric vehicles than it does the gas- and diesel-powered cars that fuel its bottom line today. He said, though, that Ford doesn’t need to spin off the EV operations to have success.

“It’s really more around focus, capability, expertise and talent," he said.

The CEO added that he believes Ford’s internal-combustion-engine business, bolstered by its top-selling F Series pickup trucks, can grow and be more profitable even as the company adds more electrics to its lineup.