By Dhirendra Tripathi
Investing.com – Ford Motor stock (NYSE:F) traded 4.4% higher in premarket Wednesday on a Reuters report the company plans to operate its electric vehicle (EV) and internal combustion engine (ICE) units as separate businesses.
The move is aimed at fast tracking growth in the EV business, a focus area for most automakers today.
The EV and ICE businesses will have separate names but will remain under the Ford corporate umbrella, in the same way the company operates its Ford Pro commercial business for corporate customers, the news agency said.
The company plans to have separate executives leading the businesses to eventually have separate financial results being reported at the two units.
The reported exercise is still far from the spinoff most analysts and investors have long called for at American legacy automakers, struggling with their legacy businesses while pure EV players like Tesla (NASDAQ:TSLA) and China’s Nio (NYSE:NIO) and Xpeng (NYSE:XPEV) take away much of the share of the new market.
A spinoff will attract better valuations for the EV business and redirect resources to the faster-growing segment. At $893 billion, Tesla is valued at more than the combined market cap of most major automakers in the world.
While Chief Executive Jim Farley of Ford has so far ruled out a complete hive-off, as quoted by Reuters, and industry officials believe the current plan is a precursor to that.