Dealer associations don’t like Ford’s EV sales requirements

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Ford has big plans for electric vehicles and wants dealerships 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 violates certain franchise laws”.

The associations’ problem is that Ford is requiring up to $1.2 million in investment for dealer training and upgrades for electric vehicle sales. If dealers don’t want to shell out the $1.2 million for full upgrades, they can invest just $500,000. But Ford is reportedly limiting its electric vehicle sales to just 25 a year. Some say it could be illegal because it essentially limits the models dealers can sell, which skews 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 maintained that feedback from its dealers about 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 then, however, dealer associations have started to worry, mainly about their bottom line.

EVs don’t require a lot of maintenance because they have fewer moving parts, namely the lack of motors, but they still need fixing for things like brakes and tires. But Ford’s profit margin structure with electric vehicles worries some dealers. A dealership was told by Ford that it “will lose two percentage points of guaranteed margin in the first two years of the program unless it meets certain requirements.” Jim, CEO of Ford 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 Auto Association CEO John Devlin doesn’t really think customers will want to come to the dealership to charge their vehicles.

“I don’t think I’ve spoken to a dealership that thinks the public is going to come to dealerships in significant 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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