Ford to Dealers: Drop Dead...eventually.
Courtesy FordCar companies know your least favorite part of the buying experience: dealing with dealerships. Salespeople are aggressive — whether the contact occurs by an in-person meeting, phone, email or text. Nothing mitigates the excitement of buying a new car quite like filling out a mountain of paperwork. And dealers are now turning record profits with egregious markups due to the industry’s current supply and demand issues.
Ford wants to change that. At the Bernstein Strategic Decisions Conference, CEO Jim Farley expressed his desire to move EV sales off the traditional dealership model. “We’ve got to go to non-negotiated price,” Farley said. “We’ve got to go 100% online.”
Dealerships would not go away under Farley’s vision. They would pivot to being pickup, delivery and service centers. Its robust dealer network is a strategic advantage for Ford when selling EVs vs. electric startups. If you’re looking to build out your fleet, Ford has a network of around 3,000 dealers where you’ll be to get a vehicle fixed. Rivian currently has fewer than 20 locations.
Farley’s EV sales model remains an aspiration, not a formalized plan from Ford. The move could get tricky in certain states like Michigan, where automakers themselves have promoted laws that ban direct vehicle sales and service — which blocks Tesla from fully setting up shop. And any extensive operations change at a massive, entrenched company like Ford would take time to implement.
Ford isn’t the only automaker considering this issue. Volvo is pivoting toward online sales with its electric cars. You can only buy the C40 Recharge and Polestar vehicles online. Mercedes is about to push dramatically toward direct online sales where feasible. VW dealers are worried that the new Scout off-road pickup and SUV brand will bypass them entirely.
Ford may not have a no-nonsense online sales solution set up yet. But with epic dealer markups pushing the F-150 Lightning well past the price point of its intended customer base, it’s not surprising Ford is interested in finding one.
Keyword: Ford Want to Eliminate the Worst Part of Buying a Car