In an unsurprising organizational move, Ford motor company announced a major split between its combustion engine division and burgeoning electric engine business. Though the company will still focus on producing and marketing “automobiles,” it will now account for revenues in two separate ways; the former division will likely serve as the lifeblood for the latter until the industry as a whole catches up with electric innovator Tesla.
Ford’s lawyers must have seen the move coming eventually because they protected the name they’ve since chosen over a decade ago. In fact, Tesla’s CEO Elon Musk even wanted to use the simple name for his own third-generation Tesla, but Ford’s attorneys rebuffed him in 2010 with a trademark lawsuit.
“A friend asked me at a party, ‘What are you going to name the third-generation car?’ Well, we have the S and the X, so we might as well make it the E,” Musk said in a 2014 interview. The joke is that all three model names would spell S-E-X, get it?
But Musk was only half-kidding; he actually tried to name the Model 3 the Model E first. Ford called up the eccentric CEO and threatened to sue if Tesla pursued the Model E trademark, though. Turns out, Ford had saved the name for this exact day many years down the road. Now, the Ford motor company is comprised of two completely different divisions: Ford Blue, its traditional combustion business, and Ford Model e, its new electric business.
And Musk had to settle for the internet-friendly, keyboard version of his infamous joke: S3X.
Ford’s name for its electric division is decades, maybe even a century, in the making
Ford’s primary legal standing for protecting the letter ‘E’ actually dated back to founder Henry Ford, himself. The company’s original Model T, which revolutionized the automobile industry, sounds a lot like the phrase Model e. Lawyers argued for years that any usage of the ‘E’ in auto jargon could confuse consumers, and judges agreed. Ford even stopped small car businesses from using the name, including a leasing start-up over two decades ago in the year 2000.
Now, it seems, the company will simply settle into the little divot in the market they’ve so-furiously protected for decades.
Ford says that splitting into two units will help boost profits and streamline operations. The reorganization will allow engineers, designers, and other Ford employees to focus on a single purpose, according to the company. This way, employees won’t be asked to split time between the two brands. Ford also said their forecasts suggest that the new structure will help it nearly double profit margins by 2026. By that point, Ford estimates it will produce more than 2 million electric cars.
Ford shares rose roughly seven percent in the market Wednesday on the news.