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Ford named its new electric-car business what Elon Musk wanted to call the Tesla Model 3

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Tesla CEO Elon Musk waving.
Tesla CEO Elon Musk, pictured in 2019.REUTERS/Shannon Stapleton/File Photo
  • Ford is splitting into two auto businesses: one for electric cars and one for combustion ones.

  • The electric unit will be called Ford Model e, a name the company barred Tesla from using years ago.

  • Elon Musk wanted to call Tesla's third mass-produced car, the Model 3, the Model E.

Ford announced a major restructuring on Wednesday, saying it will create two auto businesses: one focused on traditional combustion engines and another dedicated to the company's burgeoning electric-vehicle efforts.

The name Ford chose for the latter should ring a bell for Elon Musk.

The gasoline division will be called Ford Blue, while its EV counterpart will be known as Ford Model e, a name the Detroit automaker stopped Tesla from using nearly a decade ago.

After the release of Tesla's Model S and Model X, Musk planned to name the company's third major vehicle the Model E. (It spells "sex," get it?)

"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 told CNN Money in 2014. But Ford called up Musk threatening to sue if Tesla pursued the Model E trademark, he told the outlet.

Tesla and Ford entered a contract in 2010 that prohibited Tesla from using the Model E name, and the companies resolved the dispute amicably, a Ford spokesperson told CNN Money.

Ford has sued to keep companies from using the Model E name, arguing it sounds too similar to the Model T. Ford sold cars including the Model A, B, C, F, and K, but never a Model E. In 2000, Ford sued a car-leasing startup called Model E.

Tesla kept with the suggestive theme anyway, coming out with the Model 3 sedan instead, and later the Model Y SUV.

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 either EV or gasoline efforts, rather than splitting their time between the two, the company said. Ford said the new structure will help it nearly double profit margins by 2026, the same year it plans to produce more than 2 million electric cars.

Shares of Ford surged roughly 7% on the news Wednesday morning.

Got a story to share about the auto industry? Contact this reporter at tlevin@insider.com

Read the original article on Business Insider