Ford outlined a set of requirements for its dealers looking to sell the automaker’s electric vehicles, such as setting prices without haggling and investing more than $1.2 million in upgrades such as charging, according to Automotive News. The company has framed the investment as necessary if Ford is to compete with — and perhaps overtake — direct selling competitors like Tesla.
Dealers have until October 31 to sign up for two levels of EV certification, with varying levels of investment in charging and staff training. High-end dealers, which cost $900,000 upfront, will receive “elite” certification and will be allocated more EVs, executives said. Those dealers who don’t opt-in will be banned from selling the company’s legacy internal combustion engine and hybrid vehicles.
The bulk of the money will be spent on installing DC fast chargers on site, one of which should be publicly available to customers. Installing EV chargers can be expensive depending on the level of charge offered. The higher the level, the faster the charge and the more expensive it is to install. A level 2 public charger might cost $2000 out of the box, but a 150 kW or more DC fast charger can cost between $100,000 and $250,000. Only a few dozen of Ford’s nearly 3,000 dealers in the US currently have the high-speed chargers.
The ultimatums came nearly six months after Ford split its company into two divisions, one focusing on its old combustion-engine vehicles and the other on the products it sees as its future, such as the F-150 Lightning and Mustang Mach-E.
Ford presented these new rules this week at a dealership conference in Las Vegas, where the company expected to urge dealers to save as much as $2,000 on the cost of delivering an EV to a customer. The cost reduction is seen as critical to helping the automaker better compete with Tesla.
Naturally, Tesla surpasses Ford by a wide margin and owns about 75 percent of the EV market in the US. The Tesla Model 3 and Model Y are the top two selling EVs, followed by the Ford Mustang Mach-E — but it’s a distant third, with 6,734 Mach-E deliveries in Q1 2022 compared to 46,707 units for the Model 3 .
At the conference, Ford told dealers that electric car prices are non-negotiable and dealers are not allowed to stock plug-in vehicles. Ford is trying to get a handle on dealer price increases, which it sees as a barrier to higher sales and more customers agreeing to the company’s vision of an all-electric future. The average retail price for an EV is currently about $66,000 — about 40 percent more than a gas-powered vehicle.
“We bet on the dealers”
“We bet on the dealers. We’re not going straight. But we need to specialize,” CEO Jim Farley told reporters on Tuesday after briefing dealers about the plans. according to CNBC. “The most important message I have for the dealers, which I’ve never said before, because I didn’t believe it to be true, is that you could be the most valuable franchise in our industry.”
Ford isn’t entirely flawless when it comes to EV sticker shock. The automaker recently increased the price for both the F-150 Lightning and Mustang Mach-E, citing supply chain constraints and “rapidly evolving market conditions.”
Ford doesn’t plan to follow General Motors brands like Cadillac and Buick in offering buyouts to dealers who don’t want to invest upfront to sell EVs.
“We think it’s really inappropriate because they have a healthy and high-growth business… We want them to have the choice,” Marin Gjaja, chief customer officer of Ford’s Model e electric vehicle business, told CNBC.