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Ford CEO Farley sees merit in separating EV biz to obtain Tesla-sized market cap

Van Dyke Electric Powertrain center supplies electric motors and electric transaxles for the F-150 Lightning. (Credit: Ford)

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Ford CEO Jim Farley believes there may be some merit to separating the automaker’s electric vehicle project from the company’s main operation. A pure-play EV business, separate from Ford’s reputable brand of combustion engine vehicles that have existed since 1903, may help the automaker obtain a Tesla-sized market capitalization.

Farley sees merit in potentially separating the two different powertrains into separate entities, people familiar with the matter told Bloomberg in a new report. Hoping to launch its brand into a value level similar to Tesla’s, Farley believes a spinoff business that focuses purely on electric vehicles could pay dividends, especially as Ford and other legacy automakers have committed to fully-electric futures, void of any combustion engine vehicles.

The mixup may not require a separate brand name or even split the operation. This may prove to be too difficult, and Ford is not considering the option, according to the report. Farley may separate the EV business internally as a “unit,” and it could be the first consideration in Ford’s recently-revealed $20 billion playbook mixup.

A New EV Playbook

In another report, it was revealed that Ford was willing to spend an additional $20 billion of company funds to restructure its EV playbook. Ford plans to use the massive budget to utilize specific strategies that Tesla used to gain its notoriety as the leader in the EV sector.

Ford doubles its F-150 Lightning production target again to 150k units per year

Ford intends to spend between $10 and $20 billion on the project, giving it a sky-high budget and relative free range for business moves. “We are executing our Ford Plus plan to transform the company and thrive in this new era of electric and connected vehicles. We would not comment on speculation,” Ford’s Communications Chief, Mark Truby, said in the report.

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Ford also expanded its production goals on Farley’s request. The automaker plans to deliver at least 600,000 electric units within 22 months. With the Mustang Mach-E being the number two most popular EV in the crossover market, the F-150 Lightning set for deliveries in the Spring, and the E-Transit beginning deliveries last month, Ford seems like it has the capacity, plan, and certainly the funding to accomplish its goals.

Tesla’s Massive Market Cap

Tesla is the world’s most valuable automaker by a considerable margin. Led by its massive increase in stock price over the past two years, Tesla has skyrocketed to monumental levels not thought to be possible at one point for a simple automotive company. However, Tesla has revolutionized the way the consumer market looks at vehicles, turning them from machines to technological marvels that receive updates just like a cell phone.

Tesla stock has gained over 856 percent since January 3, 2020. Most of the company’s increased valuation came from profitability, increases in production and deliveries, the introduction of new battery and safety technologies in its vehicles, and a resilience through the COVID-19 pandemic that seemed to exist only in the automaker’s Fremont factory in Northern California. Despite Tesla being a small, scrappy automaker with as few as 80,000 deliveries in a quarter just a few years ago, the company managed to basically evade the entire semiconductor shortage thanks to engineering and stockpiling.

Nevertheless, Tesla is the perfect picture of what an EV company looks like from a financial perspective. A healthy cash flow, plenty of profitability, and continuing and proven growth gets a company to those levels. At least it does in the EV world.

ICE and EV – Like Oil and Water

“Running a successful ICE business and a successful BEV business are not the same. I’m really excited about the company’s commitment to operate the businesses as they should be,” Farley said during Ford’s recently-held Q4 Earnings Call. Farley may have been considering the option of separating the two businesses for some time. Obviously, this was not an idea that sprung up overnight. However, it appears this may have been in the works since 2021.

More Bloomberg sources said Ford had met with advisers to explore additional options for the EV operation. Farley wants to maximize the value of the EV portion of Ford’s business and has considered a potential spinoff company or even a full-on breakup. However, his idea has eventually evolved into an “internal split,” the sources said. This could still prove to be difficult, especially as it could require significant restructuring in the manufacturing layout of the company. Facilities that build both ICE and EV vehicles would need to be separated; an extremely complex task that could take a long time and cost a lot of money. Additionally, employees would have to be separated in the mixup.

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Up and Onward

Ford stock spiked on Friday following the initial reports of Ford’s potential EV-ICE business breakup. Shares were up 2.88 percent at 11:57 AM in New York.

Analysts are bullish regarding the potential of Ford’s shake-up, and the F-150 Lightning is leading the way. “Huge step in the right direction as Farley doubling down on EV vision. We believe Ford is in the midst of massive EV transformation led by Electric F-150,” Wedbush’s Dan Ives said.

Disclosure: Joey Klender is not a Ford Shareholder.

I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.

Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

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Elon Musk

Elon Musk and Trump are closer than ever, and Tesla could be the big winner

Elon Musk sat beside Trump as AI leaders signed a voluntary White House safety accord.

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Elon Musk had the seat right next to President Donald Trump on Tuesday as the White House hosted the leaders of America’s biggest artificial intelligence companies for a lunch that ended with a voluntary industry accord on AI safety.

A seating chart Trump posted on Truth Social placed Musk at the president’s left in the East Room, with Nvidia CEO Jensen Huang on his right, according to an Associated Press reporter. Anthropic CEO Dario Amodei, OpenAI President Greg Brockman, Meta’s Mark Zuckerberg, Google’s Sundar Pichai, Microsoft’s Satya Nadella and Amazon founder Jeff Bezos also attended, along with Vice President JD Vance and House Speaker Mike Johnson.

After the lunch, Trump told reporters outside the West Wing that the executives had signed “The White House Accord on Superintelligence: A Joint Commitment on Frontier SI Responsibilities.” Johnson described it as a voluntary statement of principles built on “robust internal controls and layers of internal and external review,” while Zuckerberg said company boards would independently review reports from outside auditors. Trump called the document “morally binding,” said he would name a new AI czar within days, and signed an executive order formally renaming artificial intelligence “super intelligence,” CNBC reported.

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Musk was not in the room for Tesla alone. Since SpaceX absorbed xAI, he runs the company behind Grok and one of the largest AI training operations anywhere. On September 25, he said another 220,000 Nvidia GB300 chips would come online at Colossus 2 within a week, with more expected in November and December.

SpaceX confirms third massive compute deal at Colossus data center

 

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Musk also used the trip to restate his energy ambitions. “SpaceX is aiming together with Tesla to do 200 gigawatts of solar production per year,” he said at an event in Washington. It is the same combined target he laid out that feeds directly into Terafab, the Tesla and SpaceX chip venture that will need enormous amounts of power.

The showing between Musk and Trump has come a long way, since the two had the very public split in mid 2025 after Musk opposed the “Big Beautiful Bill” and left DOGE. They reconciled at Charlie Kirk’s memorial that September, and Trump later called their relationship “good”. Since then, Musk has joined Trump’s China delegation in May and attended last week’s White House state dinner for Chinese President Xi Jinping.

For Tesla, that access to government official could pay dividends. As Teslarati noted in January, federal autonomy rules, NHTSA oversight and a single national standard for driverless vehicles all run through an administration Musk can more easily reach directly as Tesla works to scale Robotaxi and Cybercab beyond Texas.

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Investor's Corner

Tesla showrooms picked clean ahead of Q3 end as demand looks strong

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Credit: @thaichiminh1907/X

Tesla (NASDAQ: TSLA) showrooms have been picked clean ahead of the end of the third quarter of the year, as demand looks to be strong and delivery estimates for new vehicles are pushed into late 2026 and early 2027.

Tesla appears to have sold out of many of its Model 3 and Model Y trim levels in the United States, as only the Model Y RWD and Model Y All-Wheel-Drive are available for delivery before the end of the year.

Additionally, many showrooms are either completely empty or void of all but just one demo unit within the buildings themselves in an effort to bolster what could be one of Tesla’s best quarters in vehicle deliveries in recent memory.

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Additionally, when I spoke to the guys at Tesla Mechanicsburg two weeks ago, when I returned the Model Y L, their third hauler of the week had just arrived, and every vehicle on it, along with every vehicle in their delivery lot, was accounted for and had a name attached to it for delivery.

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Tesla saw a 25 percent increase in deliveries in Q2 compared to the same quarter the year before. The vast majority of the 480,126 units it delivered, 467,762 vehicles to be exact, were the Model 3 and Model Y.

In Q3 2025, Tesla delivered 497,099 vehicles, once again a figure that was dominated by the company’s two mass-market vehicles. Analysts have unusually wide predictions for this quarter, likely because so many firms missed the Q2 delivery figure by such a substantial margin; Wall Street predicted 408,000 cars, while Tesla delivered 480,000.

Goldman Sachs has Tesla slotted for 435,000 deliveries in Q3, while JPMorgan said it anticipates 482,000. The median guess is about 449,000 deliveries for Q3.

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Interested in ordering a Tesla? Use my referral code for three free months of Full Self-Driving (Supervised) here.

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Elon Musk

SpaceX turned a heralding moment for Starship into its greatest

Starship reached orbit despite losing an engine, deployed 26 Starlink V3 satellites on Flight 14.

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SpaceX’s Starship reached orbit for the first time on Monday, and for a few nail-biting minutes it looked like it wouldn’t. During ascent on Flight 14, one of Ship 41’s six Raptor engines shut down early, and SpaceX’s livestream host Dan Huot told viewers the team had decided not to commit to orbit. Minutes later, after what Huot described as a lot of conversation in the control room, the final poll came back in favor, and a roughly 19 second burn of a single Raptor pushed the ship into orbit about 170 miles up.

The reversal matters because SpaceX had written the exit ramp into the mission plan. The company said it would only fire the orbital insertion burn if flight controllers confirmed enough backup hardware remained for the deorbit burn, a condition Teslarati laid out ahead of the flight. Losing an engine was exactly the scenario that rule was built for.

Pressing forward fits Elon Musk’s history. Falcon 1 failed three straight times before its fourth launch reached orbit in 2008, with SpaceX nearly out of money, and Starship was developed by flying prototypes until they broke. What changed this year SpaceX going public, and with $SPCX sliding below its IPO price in July when Flight 13 slipped, the short interest climbed significantly, as Teslarati reported at the time. A Starship potentially lost today with revenue generating next-gen Starlink satellites aboard would have landed directly on shareholders.

That pressure showed up after orbit. SpaceX cut a flight planned to last nearly 10 hours to about three, moving splashdown from west of Chile to the North Pacific near Hawaii. SpaceX gave no reason, though Musk said this month the company was being extremely cautious about debris risk. The single Raptor for deorbit worked, and Ship 41 completed its flip and landing burn before breaking apart in the water, an outcome SpaceX expected. Musk has structured SpaceX’s governance to shield long term bets from market pressure.

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The payload is the bigger business story. Musk posted that all 26 Starlink V3 satellites deployed and are “operating nominally.” Each V3 is rated for about 1 Tbps of downlink and 160 Gbps of uplink, so this single launch adds roughly 26 Tbps, about 10 times what a Falcon 9 load of V2 Mini satellites adds. The V3 is too large for Falcon 9, making Starship the only vehicle that can build out the planned 100,000 satellite constellation, at up to 60 per flight once it reaches routine service. Unlike the 20 V3 units on Flight 13, which reentered on a suborbital path, these will raise their orbits and could begin serving customers within weeks and bring in hundreds of millions of additional dollars in projected Starlink revenue.

SpaceX has already begun winding down Falcon 9 Starlink launches from Florida in favor of Starship. Reported targets put Flight 15 as early as October 19, leaving about three weeks to diagnose Monday’s engine shutdown before the next orbital attempt.

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