(Bloomberg) -- For Ford Motor Co. boss Jim Farley, the objective in splitting its legacy and EV business lines is clear: wring profit out of gas-guzzlers to help fund electrification.
The steady earnings from Ford's internal-combustion-engine operations will bolster the automaker as it plots a $50 billion investment in electric vehicles over the next half-decade. Much of the outlay -- a boost from its prior $30 billion plan -- will go toward battery materials and plants, along with the development of new plug-in models, according to Farley.
“The funding for that $50 billion, its all based on our core automotive operations,” Ford's chief executive officer said in an interview with Bloomberg Television. “That's why we created a separate group called Ford Blue, because we need them to be more profitable to fund this inside the company.”
Read more: Ford Reorganizes to Run EV and Engine Businesses Separately
The comments offer fresh insight into the financial planning behind the historic reorganization of the 118-year-old automotive pioneer unveiled Wednesday. As it splits the business lines, Ford aims to reduce costs in the legacy operations -- potentially including job cuts -- and in the EV unit.
Other money-raising mechanisms are available. Ford could tap the debt markets and “go deeper” into green bonds, which Farley said have helped in the past. Additionally, Ford could turn to capital markets to fund development of autonomous driving technology, he said.
Farley said Ford had “carefully” explored the possibility of a spinoff before deciding on the current path, but opted against it. The company decided it could fund it internally instead.
“We don't wanna give away ownership of the business,” he said.
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