Ford has big EV plans, and he wants dealers to participate in those plans. But these plans require a large investment from dealers. While it seemed like a lot of dealers were on board, dealer association groups have other ideas. Automotive News reports that dealer associations in 13 states are speaking out against Ford’s electric vehicle investment requirements for its dealerships, saying Ford is “Unfairly burdening its retail network with onerous requirements for electric vehicle sales and violating certain franchise laws.”
The problem of associations is Ford’s requirement to invest up to $1.2 million in dealer training and upgrades for electric vehicle sales. If the dealersThey don’t want to shell out $1.2 million for full upgrades, they can only invest $500,000. But Ford is reportedly limiting its electric vehicle sales to just 25 a year. Some say it might be illegalI, as it essentially limits what model dealers could sell, skewing their inventory. Of Automotive News:
The program “fails to make all vehicle models available to dealerships on comparable terms and fails to allocate equitable amounts of electric vehicles to Ford franchise dealerships relative to their assigned market areas”, members of the Southern Automotive Trade Association Executives, which represents 12 state dealer associations. , said in a resolution.
The associations want Ford to work with dealers on better terms. But Ford disputeded that feedback from its dealers regarding the program and dealer upgrades has been positive.
So far back like 2021, just after Ford launched the F-150 Lightning and announced a $44 billion investment in electric vehicles, it looked like dealerships were on board. Ford said some 2,300 of its 3,000 dealerships across the country have signed up to become electric vehicle dealerships. Even the president of the National Automobile Dealers Association (NADA) said 17,000 of his members were on board. “Dealers sell cars and make customers happy, so why wouldn’t they want to sell electric vehicles?” he was quoted as saying. Since, yet, dealer associations began to worry, mainly about their bottom line.
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Electric vehicles do nott require a lot of maintenance as they have less moving parts i.e. no motors, bbut they still need service for things like brakes and tires. But Ford’s profit margin structure with electric vehicles worries some dealers. A dealer was told by Ford that it would be “lose two guaranteed margin percentage points over the first two years of the program unless it meets certain conditions. Ford CEO Chris Farley reportedly told dealerships that if they wanted to make up for those losses, they should offer subscription services to customers.
The other issue is the need for chargers at the dealership. Pennsylvania Automobile Association CEO, John Devlin, don’t really think customers will want to come to the dealership to charge their vehicles.
“I’m not losing weightk I spoke to a dealership who thinks the public is going to come to dealerships in large numbers to charge their cars,” he told Automotive News. But it’s not as bad as it seems. A dealer association official said Ford dealers aren’t mad at the automaker, they just want to make sure the program works for their businesses.
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