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Ford can’t afFord EV spin off at the moment

Ford Motor (NYSE: F) CEO Jim Farley denied reports claiming the company plans to spin off its electric vehicle operations from its internal combustion engine (ICE) business.

I mean, why should they?

Analysts have been urging traditional automakers like Ford & General Motors (NYSE: GM) to separate their electric vehicle business to take advantage of high market valuations given to electric vehicle makers (cc: Tesla & Rivian).

Why they won’t?

To put it simply, they’re not quite ready for the transition. 

According to Farley, Ford still needs to acquire the right talent, in addition to the company being too “complex” at the moment, which would lead to “waste” in the event of a transition.

Why are high valuations being given to EV makers anyway?

Electric motors are simpler than ICEs. They are less prone to mechanical failures, require less maintenance, & will probably last longer.

Mind boggling
118-year old Ford currently has a market cap close to $68 billion, & sold 1,905,955 in 2021 alone.

14-year old Rivian currently has a market cap close to $52 billion, & has sold a little over 1,000 vehicles since then.