Ford gives dealers an ultimatum on EV sales

Ford has given dealers in its 3,000-strong network an ultimatum and a deadline: If they want to sell EVs, they’ll need to invest their own money into the endeavor, meet other selling standards and add fast charging at their locations.

Dealers will have until October 31 to decide to buy in. If they do, they’ll be authorized to get in on Ford’s Model e business starting January 2024. Those who don’t can stick with Ford Blue, the automaker’s internal combustion engine unit.

The new standards, first hinted at during the company’s second quarter earnings call, are part of a strategy Ford shared Tuesday at its national dealer meeting in Las Vegas. CEO Jim Farley told analysts back in July that Ford would need to cut $2,000 per vehicle out of selling and distribution costs in order to reduce overhead, boost profits and compete with Tesla, which sells direct to consumers. At the time, Farley also outlined Ford’s plan to move to a low-inventory model, DTC model.

Ford is positioning the move as a chance for dealers to empower themselves and increase sales dramatically. The automaker will use about 90% of the dealers’ investments to build out charging infrastructure including DC fast chargers that will allow dealers to be part of the Blue Oval Charge Network Map, according to a Ford spokesperson, who noted that dealers will own and earn revenue from chargers.

Ford dealers will have two entry levels — Certified and Certified Elite — as well as two entry points — 2024 and 2027 — to choose from if they want to become a Model e dealer, according to a Ford spokesperson.

Certified dealers will shell out an upfront initial investment of about $500,000 and focus on ownership and charging, with limited, built-to-order sales. Elite dealers will be asked to invest $1.2 million to handle ownership, charging and sales with stock on the ground, demo units and visibility on Ford’s website.

In order to provide a more elevated service and smoother transaction experience for the customer, Ford also outlined new Model e selling standards:

  • Ford will train specialized EV teams across sales and service.
  • All Model e dealers will need to offer charging to support sales and service, and have at least one public-facing DC fast charger available on the Blue Oval network.
  • E-commerce will be available with “transparent, non-negotiable pricing for EVs.”
  • Customers will be able to access physical experiences, like test drives, trade-ins, mobile servicing and pickup and delivery.
  • Dealers will need to support customers with digital experiences like software and subscription products.

Ford is currently selling the Ford F-150 Lightning pickup, the Mustang Mach-E crossover and the e-Transit van, with more EVs expected to join the automaker’s lineup in the coming years. In May, Ford increased its electrification spend to $50 billion by 2026.

Ford gives dealers an ultimatum on EV sales by Rebecca Bellan originally published on TechCrunch