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Ford Presents Franchised Dealers With an Ultimatum on EVs

AP Photo/Gene J. Puskar, File

The momentum towards electric vehicles is unstoppable at this point, with the weight of government and private businesses behind the push. President Biden wants the U.S. to have 50 percent of vehicles sold in the U.S. by 2030 to be electric, while California and a number of other states are going even further, barring the sale of new gas-powered vehicles by 2035. Never mind legitimate questions about the grid’s ability to handle such a rapid transformation, or how “clean” EVs really are when production is considered.  Now, dealerships are facing another kind of pressure. 

Ford is asking its dealers to invest up to $1.2 million on chargers and other services if they want to sell EVs. Those who don’t want to shell out this money won’t be able to sell any future EV models, though the opportunity will come around again in 2027 to get on board. When Cadillac dealers were faced with a similar decision from GM in 2020, over a third chose a buyout instead, Axios reports.

Ford has given dealers in its 3,000-strong network an ultimatum and a deadline: If they want to sell EVs, they’ll need to invest their own money into the endeavor, meet other selling standards and add fast charging at their locations.

Dealers will have until October 31 to decide to buy in. If they do, they’ll be authorized to get in on Ford’s Model e business starting January 2024. Those who don’t can stick with Ford Blue, the automaker’s internal combustion engine unit.

The new standards, first hinted at during the company’s second quarter earnings call, are part of a strategy Ford shared Tuesday at its national dealer meeting in Las Vegas. CEO Jim Farley told analysts back in July that Ford would need to cut $2,000 per vehicle out of selling and distribution costs in order to reduce overhead, boost profits and compete with Tesla, which sells direct to consumers. At the time, Farley also outlined Ford’s plan to move to a low-inventory model, DTC model.

Ford is positioning the move as a chance for dealers to empower themselves and increase sales dramatically. The automaker will use about 90% of the dealers’ investments to build out charging infrastructure including DC fast chargers that will allow dealers to be part of the Blue Oval Charge Network Map, according to a Ford spokesperson, who noted that dealers will own and earn revenue from chargers. (Tech Crunch)

Ford announced in May that it was increasing its EV investment to $50 billion through 2026 in order to catch up to Tesla.

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