Dealers are either all in on electrification or they're going to be left out.

ford gives dealers six weeks to decide if they want to continue selling evs

In what will certainly be met with resistance from many of its franchises, Ford dropped a bomb at its annual dealership meetings in Las Vegas this week. InsideEVs was one of only a handful of news outlets invited to get an early look at the new Model e dealership rules including a presentation from none other than Ford CEO, Jim Farley.

In short, Ford is telling its dealer network they have to invest, evolve, improve, and offer new services if they want to be a Model e dealership and sell electric vehicles. Model e is a new division of Ford that was recently created when Ford split the company into three arms; Ford Blue Oval, Ford Pro, and Ford Model e. All of Ford’s fully electric vehicles now fall under the Model e umbrella. Plug-in hybrids and regular hybrids are part of Ford Blue Oval.

ford gives dealers six weeks to decide if they want to continue selling evs

Ford’s current three BEV offerings from left: Ford F-150 Lightning, Ford E-Transit and Ford Mustang Mach-E

Farely talked a lot about Tesla, and how the startup electric vehicle manufacturer has roughly a $2,000 price advantage over Ford. He said that Ford and its dealers need to, and have been, working to narrow that gap.

He explained how he believes that as Tesla scales up, it will be forced to change how it does business and its operations will begin to look more like traditional dealer networks. In fact, he’s already seeing that in Tesla’s operations in Norway.

With that, he also believes that Ford needs to change the way it sells electric vehicles, and the first major steps to that transformation are happening now.

Three Options

Ford is giving its dealers until October 31st of this year – less than two months, to make a decision that will have huge implications for the future of the franchise. The company is offering its dealers three options:

  • Become a Model e Certified Elite dealership
  • Become a Model e Certified dealership
  • Discontinue selling Model e vehicles effective January 1st, 2024.

Amongst other things, Model e Elite dealers will need to install a minimum of two high-powered DC fast chargers as well as level 2 charging stations and have at least one DC fast charger available for the public to use. Ford estimates the all-in cost for dealers to become Model e certified elite to be between $1 and $1.2 million, with as much as 90% of the cost attributed to the cost to purchase and install the required charging infrastructure.

Model e certified dealers are only required to install one DC fast charger, and it must be made available for public use. However, Model e certified dealers will have a hard cap on the number of EVs they are allowed to sell each year, and that number will be the same for all Model e certified shops, regardless of annual volume.

We were told that Ford hasn’t decided exactly what that number will be, but it will be small and intended to only satisfy orders for the dealer’s most loyal customers. Ford estimates the cost for dealers to become Model e certified to be about $500,000, again, with as much as 90% of the cost attributed to charging infrastructure.

We’ve been studying Tesla closely, especially with how their brand has scaled with units and operations in Norway and what we’ve noticed is that they have almost 1,200 employees now and they have very much dealer-like facilities and we think that’s the direction they’ll go as they scale their operations in the United States – Jim Farley, CEO, Ford Motor Company

And finally, dealers have the option of not becoming Model e certified. If they choose that route, they give up the right to sell any fully electric Ford vehicles for three years. At some point in 2025, they will have the opportunity to tell Ford that they wish to become a Model e certified or certified elite dealership, and provided they complete the requirements, they will be allowed to start selling EVs in January 2027.

If they do choose to opt out of becoming a Model e certified dealer now, there will be no opportunity of becoming one until 2027.

This first stage of Model e evolution will be in effect from January 1st, 2024 through December 31st, 2026. The decision the dealership makes now will be in effect through 2026 and dealers cannot change their Model e certification status until January 1st, 2027. All dealers will continue to be able to sell EVs until January 1st, 2024 when the new Model e rules begin.

ford gives dealers six weeks to decide if they want to continue selling evs

2022 Ford F-150 Lightning Towing

Five Pillars

Ford explains that its Model e dealership strategy will be built upon five pillars:

  • Training: Dealers will need to undergo extensive EV training on an ongoing basis
  • Charging: Model e dealers must have adequate level 2 and DC fast charging, with at least one DC fast charger available to the public
  • Set Pricing: Transparent, non-negotiable pricing available online
  • Excellent physical experience: Model e dealers must deliver an excellent ownership experience, including complimentary pickup and drop off for vehicle service visits
  • Develop digital experience: Invest in building a digital ownership experience for the future

No-Haggle Pricing, But It’s Not Direct Sales

When Ford announced the creation of Ford Model e, some speculated that one of the purposes may be to try to implement a hybrid version of a direct sales model in which customers would order their EVs directly from Ford but take delivery from a local dealer.

That won’t be the case. The dealer franchise laws are very clear, and Ford cannot sell vehicles to consumers directly even if they wanted to. The only reason EV upstarts like Tesla, Rivian, and Lucid are able to (and even these companies are banned from selling vehicles in some states) is because they don’t have an existing network of dealerships, as Ford does.

But Ford believes its dealer network is a strength, not a weakness, they just need to improve the sales process and customer experience with electric vehicles, and that’s exactly what Model e aims to do.

The new rules for Model e dealerships require dealers to post set prices for the electric vehicles online at Ford.com. Customers can view the set pricing, complete the purchase online, and even schedule home delivery. But ultimately, it’s the dealer’s decision what the set pricing will be for the vehicles, and there will likely be price variation from dealer to dealer. Customers will be able to cross-shop different local dealers’ prices online, and then choose the one with the lowest set price. The dealers must honor the set pricing for every purchase, and Ford will be checking the purchase orders to make sure that happens.

This new system gives the customer the option of doing everything online and completely eliminates the need to visit the dealership. Of course, if the customer prefers to visit the dealership, kick the tires and complete the purchase agreement in person, they are still welcome to do so. However, it will be for the same price they could have purchased it online from the Ford.com website, the dealers cannot change the price once it’s set.

ford gives dealers six weeks to decide if they want to continue selling evs

Ford DC fast chargers

Charging Is Key

A huge (and most expensive) part of the Model e certification is the requirement for dealers to provide DC fast chargers with a minimum output of 120 kW. The chargers must be readily accessible on the property and available to the public. This requirement was born from the fact that Ford knows that a major pain point for consumers transitioning to EVs is the concern over fast charging availability, especially for those that live in apartments and cannot charge at home.

Dealers will be able to tell customers that whenever they need to charge, wherever they are, they can find a Ford dealership nearby where they can plug in. That’s because Ford currently has 2,991 dealerships in the US and 96% of Americans live within 25 miles of a Ford dealership, and 85% live within 10 miles. So basically, you’re just about always close to a Ford dealer, and if they all install DC fast chargers, the Blue Oval Charging Network will have pins on the map just about everywhere.

ford gives dealers six weeks to decide if they want to continue selling evs

The service providers that will assist Ford’s dealers with EV charging infrastructure

Ford has also established relationships with three charging station installation providers; ABB, Entech, and AGI. These companies specialize in facilitating the installation of DC fast chargers, which can be quite complicated as well as expensive.

Depending on where the dealer is located, one of these companies will assist the dealer during the entire process, from filing the necessary permits to utility interconnection, to the actual installation of the stations and even making sure the dealer gets any available public funding available for EV charging infrastructure.

This is a very important component of the plan because installing high-powered DC fast chargers is a complicated process, one that most dealers will require assistance with. Ford also has programs in place to provide financing to its dealers for large capital improvements like this if the dealer needs financial assistance.

ford gives dealers six weeks to decide if they want to continue selling evs

Bold New Start

We think Model e’s new rules are a good start for the brand. Ford talked a good game at the meetings; everything was about building a better customer experience, offering the customer more options, evolving to meet a changing marketplace, everything we want to hear.

However, it will all come down to execution, it always does. What will be the uptake from dealers? How competitive will the new no-haggle set prices be? The dealers are the ones setting the prices, so what if they all set prices above MSRP? How reliable will Ford’s DC fast chargers be? Will Ford monitor the uptime of the units and force the dealers to quickly repair the chargers when they go offline?

There are still a lot of unknowns to this plan, but we give Ford credit for being the first existing OEM to attempt to improve its EV buying experience in such a significant way.

Keyword: Ford Gives Dealers Six Weeks To Decide If They Want To Continue Selling EVs

CAR'S NEWS RELATED

An affordable Toyota-built, Suzuki hybrid small SUV in Australia to undercut the Kia Seltos, MG ZS and Haval Jolion?

Modern, chunky and undeniably Suzuki, the new Grand Vitara hybrid has to wait until the current S-Cross and Vitara cease in Oz. An all-new Suzuki-designed and based, but Toyota built and optional Yaris hybrid-engined, small SUV may be on its way to Australia… eventually. Unveiled in India as the ...

View more: An affordable Toyota-built, Suzuki hybrid small SUV in Australia to undercut the Kia Seltos, MG ZS and Haval Jolion?

Tour the $35,000 Ford Maverick Lariat's small but wildly functional truck bed

The 2022 Ford Maverick Lariat. Tim Levin/Insider The 2022 Maverick is Ford’s newest, smallest, and cheapest pickup.  It starts at $20,000. I tested a well-optioned, $35,000 Maverick Lariat to see the type of bed you get when you spend a bit more.  The Maverick Lariat came with a multi-position ...

View more: Tour the $35,000 Ford Maverick Lariat's small but wildly functional truck bed

Is the 2023 Ford Maverick a Ute?

What is a ute? Is the Ford Maverick a ute? Is the 2023 Ford Maverick available for order? Is there a Maverick Tremor? There’s no denying just how popular the Ford Maverick has been. As a small truck, it offers compact sizing and an affordable price tag. In fact, ...

View more: Is the 2023 Ford Maverick a Ute?

These 2 Affordable Subcompact Cars Tied for First Place In U.S. News’ Rankings

The 2022 Hyundai Accent is the best subcompact car The 2022 Nissan Versa tied with the Accent for first place Which is the best subcompact car for you? In recent years the subcompact car class has faltered in popularity, thanks partly to the availability of several fuel-efficient crossover SUVs ...

View more: These 2 Affordable Subcompact Cars Tied for First Place In U.S. News’ Rankings

Ford Truck Concepts We Wish Were Made

2002 F-350 Mighty Tonka concept 2006 Super Chief concept truck 2001 F-150 Lightning Rod 2008 Ranger Max concept truck 1994 Power Stroke concept truck Ford is number one in pickup truck sales and has been for decades. It knows trucks and knows how to do truck concepts as well. ...

View more: Ford Truck Concepts We Wish Were Made

Ford Ranger V6 review: it's a good Sport

Ford Ranger Sport V6 3.5t Towing $75,490 Price 600Nm Torque 8.4L Fuel Economy Pros Seductive V6/AWD powertrain Loaded with technology Looks truly truck-like  Cons Lower quality footwear than Wildtrak Vague gear selector (are we in reverse yet?) Flaky wireless phone projection So here’s the deal: if you have $75,490 ...

View more: Ford Ranger V6 review: it's a good Sport

Here is the feature that made the 1966 Ford GT40 so great.

Professional racing has always been a cutthroat sport. Not only between the racers themselves but also between the automakers that they represent. A lot is on the line with big races like Daytona and 24 Hours of LeMans. The biggest being the pride of automakers participating in the race. ...

View more: Here is the feature that made the 1966 Ford GT40 so great.

Ford Mustang California Special review – American muscle at its finest

Muscle car for the 21st Century Ford Mustang California Special The Ford Mustang to this day remains true to its original ethos of the affordable sports car, evoking the same inner joy as vehicles two, three, even four times its price. In California Special guise, of which there are ...

View more: Ford Mustang California Special review – American muscle at its finest

Are All Ford Mustangs Rear-Wheel Drive?

Top 8 Most Affordable Sports Bikes for 2022

The 2023 Kia Niro Hybrid Is the Ford Maverick of Compact SUVs

The 2022 Ford F-150 Is A Big Deal For Short Drivers

Ford Mustang: Past, present and future | Autoblog Podcast #749

Over-the-Air Software Update Brings Additional Camera Functionality to Our Ford F-150

Ford faces class-action over roof strength on Super Duty trucks

2023 Ford Super Duty, 2023 BMW XM, 2023 Mercedes-Benz EQS SUV: The Week In Reverse

Could the Ford Focus and Fiesta ST hot hatch live on in an electric future?

The lessons Ford is learning from Tesla might make it an electric-car powerhouse

How Much Does the 2023 Ford F-150 Cost?

2022 Mazda CX-9 vs. 2022 Ford Explorer: Which Midsize SUV Should You Pick?

OTHER CAR NEWS

;
Breaking thailand news, thai news, thailand news Verified News Story Network