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1,920 Ford dealers have signed up for a controversial EV sales program.
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Ford said earlier this year that dealers would have to invest up to $1.2 million to sell EVs.
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“We’re betting on the franchise system,” said CEO Jim Farley.
Ford’s electric purchase will soon mirror the experiences of upstart EV-makers like Tesla and Rivian.
Nearly two-thirds of Ford’s 3,000 US dealerships have agreed to new no-haggle EV sales standards, CEO Jim Farley said Monday at a conference in Detroit, signaling the next step for Ford as it aims to become the number one US seller of EVs.
Since the launch of the Mustang Mach-e and F-150 Lightning electric vehicles, Ford under Farley has accelerated its push toward an all-electric future. The move to transform the dealership experience is just the latest in a series of strategic changes for the company this year, including restructuring the company’s powertrain divisions.
The program has already encountered some opposition, including a lawsuit from New York dealers filed last week. They say the EV sales requirements set by Ford violate franchise laws with illegal pricing requirements and illegal allocation systems.
Ford said it believes the EV sales program does not violate any franchise laws, and Farley said Monday that the company is trying to integrate its dealers into its EV future, unlike rivals. to startups like Tesla, Rivian, and Lucid.
“We bet on the franchise system,” Farley said. “We like to work with our dealers, but there are some things our customers prefer not to discuss.”
To meet some of its “non-negotiable” customer demands – such as no-haggle pricing – Ford told dealers earlier this year to invest in a new EV sales structure or be left behind. Following an announcement in September, dealers have until October 31 to decide whether they will invest up to $1.2 million and comply with the new sales standards for electric vehicles.
These sales criteria include no-haggle pricing and more factory orders for lower-priced EVs, while investments go into EV charging stations and other infrastructure upgrades. Dealers have until October 31 to join the program, or avoid selling EVs in their stores.
There are two tiers in the EV sales program: Certified Elite and Certified. In the elite track, dealers are required to invest up to $1.2 million in facility upgrades and training for staff. On the certified track, the investment requirement is lower – $500,000 – but the limits limit EV sales at the dealership to 25 per year.
Of the 1,920 dealers who signed up, most chose the Certified Elite track, Farley said.
Farley wants Ford to compete directly with Tesla, and points to Tesla’s direct sales model as a guidepost for squeezing more profit out of each vehicle. Meanwhile, startups using the direct sales model have several hurdles to overcome as they navigate state franchise laws and find ways to get vehicles into customers’ driveways.
Read the original article on Business Insider
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