Ford Is Burning Through Cash to Catch Up With Tesla

Ford has worked to compete with Tesla for years, at least when it can stop tripping over itself. The results have been, also, generally very good, with the Mustang Mach-E well-received, and the F-150 Lightning even better-received, and the E-Transit probably the best of the bunch, making Ford the number-two EV seller in America, behind Tesla.

Ford is so committed to the competition, in fact, that it is separating its EV business from its ICE business, which practically means reporting different financial results but, more symbolically for Ford, means that Ford is trying to think of itself in a different way. In the meantime, according to Bloomberg, this will also have the effect of allowing the rest of us to see just how much money Ford is dumping into EVs.

“Our battery electric vehicle business is a startup buried within Ford,” John Lawler, the automaker’s chief financial officer, said in an interview. “And now we’re going to show the transparency of what that startup is. And like any startup, they’re at a loss in the beginning.”

The purpose of what Ford insiders call a “re-founding” of the 120-year-old company is to chase Tesla’s strong margins, which are three times more than Ford’s highest hopes for its EV business. Farley has also said he wants to command the kind of investor respect that has made Elon Musk’s company the world’s most valuable automaker.

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Separating Ford’s EV operations into its own unit — dubbed Model e — is seen as a move toward achieving those ambitions by first bringing financial accountability to the business.

Model E, you’ll recall, is what Elon Musk wanted to call the Model 3, because he wanted to say the word sex, because he has a brain the size of a peanut. The only problem is that Ford wouldn’t let him, and now Ford is using Model e for its own purposes, which is probably an intentional choice.

More substantively, Bloomberg says Ford is getting more Tesla-like in not reporting sales results by region, and instead giving a global number going forward, which is what Tesla has always done, to the occasional consternation of car bloggers and Wall Street analysts. Ford also wants its credit to be investment-grade again, though Ford also seems a little all over the place these days, and the best advice for Ford in the story comes from one of its own executives.

Lawler hopes that by revealing results for each of its business units, it will give the rating agencies more to chew on as they assess when to upgrade the automaker.

“Showing how we’re delivering for each of those businesses and how we’re allocating the capital is a plus for them,” he said. “But it’s not up to us. So we need to stay focused on delivering.”

That’s right, Ford, keep your eyes on the prize. The first new quarterly report under the new structure comes out May 2.