Dealership Associations Aren’t Too Happy About Ford’s EV Requirements for Its Dealers
Ford has big EV plans, and it wants dealers to be in on those plans. But those plans require a big investment by dealers. While it looked like a lot of dealers were on board, dealer association groups have other ideas. Automotive News reports that dealer associations in 13 states are coming out against Ford’s EV investment requirements for its dealers, saying that Ford is “unfairly burdening its retail network with costly requirements for electric vehicle sales and breaking some franchise laws.”
The problem the associations have is Ford’s requirement of up $1.2 million in investments for dealer training and upgrades for EV sales. If dealers don’t want to pony up the $1.2 million for the full upgrades, they can invest just $500,000. But Ford would cap their EV sales at just 25 per year. Some say this could be illegal, as it essentially limits what models dealers could sell, skewing their inventory. From Auto News:
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The program “fails to make all vehicle models available to dealers on comparable terms and fails to allocate equitable quantities of EVs to Ford franchised dealers 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 has contended that feedback from its dealers regarding the program and dealer upgrades has been positive.
As far back as 2021, right after Ford debuted the F-150 Lightning and announced a $44 billion investment in EVs, it seemed as if dealers were on board. Ford said some 2,300 of its 3,000 dealers across the country had signed on to be EV dealers. Even the president of the NADA (National Automobile Dealers Association) said that 17,000 of its members were on board. “Dealers are in the business of selling cars and making customers happy, so why wouldn’t they want to sell EVs?” he was quoted as saying. Since then, though, dealer associations have started to worry, mainly about their bottom lines.
EVs don’t require much maintenance because they have fewer moving parts, namely the lack of engines, but they still need service to things like brakes and tires. But Ford’s profit margin structure with EVs worries some dealers. One dealer was told by Ford that it would “lose two percentage points of guaranteed margin over the first two years of the program unless he meets certain requirements.” Ford CEO Jim Farley has allegedly told dealers if they want to make up for these losses they should push subscription services on customers.
The other pushback is on the need for chargers at the dealer. The CEO of Pennsylvania’s auto association, John Devlin, doesn’t really think customers are going to want to come to the dealership to charge their vehicles.
“I don’t think I’ve talked to a dealer who thinks the public’s going to come out in any significant numbers to dealerships to charge their cars,” he said to Automotive News. But it’s not as bad as it seems. One dealer association official said that Ford dealers aren’t mad at the automaker, they just want to make sure the program works for their businesses.
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