After asking its dealers to join it “on an epic journey of sustainable expansion,” Ford revealed over two-thirds of its dealers joined almost a year ago. However, close to 400 dealers have dropped out of the program since then.
Ford asked its dealership network to become a part of the automaker’s “revolutionary” EV transformation last year.
In December, CEO Jim Farley revealed that 1,920 dealers joined the program. Of them, 1,659 dealers chose the higher “Certified Elite” tier.
The other 261 went with the “Certified” tier. The lower level requires a $500,000 initial investment and includes repair and maintenance and one public DC fast charger. For around $1 million, dealers can opt for the higher “Elite” tier, which includes an additional fast charger, demo units, rapid replenishment, and a presence on Ford.com.
An Automotive News report last week revealed Ford would ease EV dealer requirements following “changes in the market.” The program has been met with its fair share of criticism. Last week, Illinois’ state motor vehicle board handed Ford dealers a victory after about 26 of them argued the company’s EV program violated state laws.
The changes include fewer L2 chargers and an extended installation deadline. Dealer training will also be cut in half to around $20,000.
Ford loses participants from its EV dealer program
A spokesperson from the company told Electrek last week that the changes “relate to changes in the market, not a result of the Illinois outcome.”
Ford said it would appeal the decision. “Ford stands by its voluntary Model e program,” a spokesperson explained. “The program is designed to ensure that Ford and its dealers” provide EV customers with a class-leading experience.
The news comes after Ford said it would ease restrictions in January, including allowing dealers to change tiers or opt out.
According to the AN report, nearly 400 dealers have dropped out of Ford’s EV sales program since December.
To keep up with Tesla and other direct-to-consumer rivals, Ford will create “retail replenishment centers” where Certified Elite dealers can replenish stock. Ford said the changes will help cut costs and are “designed to improve the speed and efficiency in which dealers and, therefore, customers can receive their EVs.”
According to a company spokesperson, elite dealers will hold “limited” stock for customer test drives.
Ford said Monday that enrollment in its EV dealer program has fallen to around 1,550, or about 53% of its network.
Electrek’s Take
Farley said rivals like Tesla have a $2,000 advantage due to their DTC sales model. He insisted the company needs to lower costs to compete.
Rather than cutting out the middle man, Ford executive chairman Bill Ford said the company was “betting on the dealers,” explaining, “We’re not going direct.”
Top comment by David Dallas
The dealers make more from their service department that anywhere else so it stands to reason that they don't want to push sales of low maintenance electric vehicles or even sell them at all. According to the NADA, 49.6% of the dealership's gross profits come from the service and parts department alone.
However, Ford said, “But we need to specialize.” The EV dealer program was designed to do that. But with backlash from dealers, Ford is easing requirements.
The move comes after Ford announced several major delays to its EV plans. Ford is pushing back around $12 billion in EV spending altogether.
It also cut one of three shifts at its EV plant in Michigan, where the F-150 Lightning is built. CFO John Lawler added the company has “taken out some Mustang Mach-E production” last month. He explained, “We are also slowing down several investments, including making a decision with SK On to delay the second BlueOval SK JV battery plant in Kentucky.”
Meanwhile, overseas rivals like Hyundai see the US EV market as an opportunity, doubling down on its own plans.
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