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Ford

Ford Dealers Will Have to Pay Extra to Sell EVs

The Blue Oval pushes forward with its no-haggle-pricing plan and asks for a big investment from its dealer network

  • Ford announced a new selling model at its North American dealer meeting that includes no-haggle pricing and EV specialists.
  • Dubbed Model e, the process requires a substantial initial investment to get ready for a more EV-focused lineup.
  • Dealers opting out will be limited to gas-only and hybrid vehicles.

Following other manufacturers' lead in the market, Ford has recently announced a new dealership model with stringent new sales standards to foster a better environment for electric vehicles. As reported by Automotive News, the Blue Oval is requiring its dealers to adopt a no-haggle price policy — as is common for Tesla and upstart EV companies like Rivian and Lucid — and invest up to $1.2 million to sell Ford EVs. The fee will go toward installing fast-charging stations at the dealership. Dealers have until October 31 to opt into one of two EV certification tiers and choose their investment commitment. Those who don't will be limited to internal combustion engine and hybrid-powertrain vehicles and EVs will be off-limits.

Ford is just the latest legacy automaker to demand additional resources from dealers as they attempt to keep up with new EV manufacturers. In 2020, Cadillac offered a $300,000 to more than $1 million buyout to its dealers across the country if they opted out of the EV boom. GM stablemate GMC followed up, dangling a carrot in the form of Hummer EV deliveries to dealers that invested hundreds of thousands of dollars in equipment to prepare for its arrival.

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Highlights of Ford's Model e program

In its North American dealer meeting this month, Ford announced a sweeping reform of its dealership strategy and dubbed it Model e. The name is strongly correlated to the release of its Mustang Mach-E, but Ford has more EVs up its sleeve; the Blue Oval previously announced a $22 billion investment in electrification through 2025 and the new F-150 Lightning has generated largely positive feedback.

The pillars of Ford's Model e program include training, charging, e-commerce, physical experiences and digital experiences. Ford is moving to transparent, non-negotiable pricing for its automobiles and hiring specialized EV teams across sales and ownership to smooth out the edges of the EV transition.

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Even before 2020, dealership models were shifting. Tesla had been pushing the edges of what the dealership community considered acceptable for quite some time by then, partially by challenging franchised dealer laws across the country. As legacy automakers watched, buyers discovered they kind of liked this new buying experience that didn't require any negotiating or hours sitting at the dealership. Consequently, as manufacturers started ramping up their electric vehicle strategy, they began to experiment with changes in the model.

In some states like Texas, direct-sale companies like Tesla are prohibited from selling directly to buyers due to entrenched franchised dealer laws. That's ironic, since Elon Musk and company built a massive headquarters and factory near Austin, Texas, to manufacture components. While Tesla has been fighting the laws, it's a slow-moving process.

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Dealership tiers explained

Automotive News explained that dealerships opting for the top tier of the Model e certification programs — Model e Certified Elite — will invest $900,000 up front to install two DC fast chargers, with at least one being public-facing. A further $300,000 investment will likely be required by 2026 to add a third fast charger. Certified Elite dealers will carry some stock and have models on-hand for demonstration, Ford said.

The lower tier — Model e Certified — requires a $500,000 investment that will cover the cost of installing one public-facing fast charger. There are some exclusions at this tier, however. Ford will limit the number of EVs the dealership can sell, and the dealer won't have any inventory or demo units on the floor for prospective buyers to try out.

Ford is pressing forward but building in a measure of grace for its dealers. Starting in January 2024, certifications will be effective until December 31, 2026. If a dealer opts out of EV certification by then, it will have another chance in 2027.

Edmunds says

Ford, GMC and Cadillac are responding to the idea that the old model of selling cars isn't the ideal solution for every buyer. The new initiatives give buyers more options, streamlines the process, and, more importantly, gives them a fighting chance against flashy new EV automakers.