Ford says it will increase investment in EV by $30 billion

CNBC's Phil LeBeau reports Ford's announcement of a big investment increase in electric and autonomous vehicles. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

Ford Motor said Wednesday it expects electric vehicles to make up almost half of its global sales by 2030 under the company’s latest turnaround plan.

Its plan includes increasing its investment in EVs to more than $30 billion through 2025.

Ford announced the plans during its first investor day under CEO Jim Farley, who took over the helm of the automaker on Oct. 1. The highly anticipated event focused on Farley’s new “Ford+” plan to turn around its operations and expand into emerging markets such as connected vehicles and subscription services.

“This is our biggest opportunity for growth and value creation since Henry Ford started to scale the Model T, and we’re grabbing it with both hands,” Farley said.

Shares of Ford reached a new 52-week high during intraday trading Wednesday morning. The stock was up by as much as 8.9% to $13.95 a share during the event. It was trading slightly below that afterward. Its market cap is about $54 billion.

The increased investment in EVs is up from $22 billion that the company announced in February, of which about $7 billion had already been invested since 2016.

With the new investment and plan, Ford said it expects 40% of its sales volume globally to be EVs by 2030. That compares with General Motors’ recently announced “aspiration” to exclusively sell EVs by 2035.

Hau Thai-Tang, Ford’s chief product platform and operations officer, took aim at GM during the investor event: “This is not some future aspiration at Ford,” he said regarding connected EVs such as the Mustang Mach-E crossover.

Through vehicle connectivity and expected battery breakthroughs, Thai-Tang said Ford believes its EV business can be more profitable over time than its current business.

Ford+

Under Farley’s Ford+ plan, the company said it hopes to achieve an 8% adjusted profit margin before interest and taxes in 2023. Farley’s predecessors, Jim Hackett and Mark Fields promised the same, but it never materialized.

“We’re running a much tighter ship,” Farley said after discussing how the automaker failed to meet Wall Street’s expectations in recent years.

Hackett and Fields were criticized by Wall Street for failing to detail their plans after then-CEO Alan Mulally saved the company from bankruptcy during the Great Recession.

Farley’s overarching plan sounds reminiscent of a highly touted restructuring plan and rallying call under Mulally called “One Ford.”

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