Ford shares soar after news of potential spin-off of electric vehicle business
Ford CEO Jim Farley speaks to reporters outside the company’s world headquarters on May 19 in Dearborn, Michigan, following the debut of the F-150 Lightning electric pickup truck.
Shares of Ford Motor jumped more than 5% during trading on Friday morning after reports that CEO Jim Farley is weighing whether to separate its electric vehicle business from the automaker’s traditional engine operations.
Farley wants to separate Ford’s electrical operations from his internal combustion engine business and is considering spinning off one or the other. Bloomberg News It is reported with reference to sources familiar with the progress of work.
Ford shares rose as much as 5.4% to $18.48 on Friday before flattening out at $18.11 a share, up 3.3%.
Ford did not immediately respond to the comment.
The report comes weeks after Bloomberg reported that the company was valuing spinning off a small portion of its electric vehicle business as part of a reorganization to capture the profits investors are awarding to some electric vehicle startups.
Spinning off any of the operations would be in stark contrast to Ford’s biggest competitor in the US, General Motors. GM executives said the automaker has no plans to spin off its electric vehicle business at this time, despite pressure from Wall Street.
In November 2020, GM President Mark Reuss stated that the company had analyzed the potential for a spin-off and concluded that it was not suitable for its business, citing the costs as well as the benefits of having electric vehicle operations remain part of a larger company.