After asking its US dealers to either go all-in on EVs or wait until 2027, Ford is now reconsidering a few of the most significant details behind its Model e dealer program.
Ford considering major changes to its EV dealer program
Ford had a big year in 2022, climbing to become the second-largest EV maker, with 61,575 total electric vehicle sales last year. However, the company expects to take an even bigger leap in 2023.
To streamline production and maximize growth, Ford revealed in March that it would report in three distinct business divisions. Its EV company, called Model e, will focus on battery electric vehicle innovation and production at scale.
For them to compete with Tesla, Ford’s CEO Jim Farley acknowledged the company needs to cut costs, increase profitability, and maximize the customer experience.
A big part of this strategy includes getting dealers on board. Ford gave its dealership network the option to either join them “on an epic journey of sustainable expansion” or wait until 2027 to sell EVs.
The program includes different tiers, giving dealers two investment options. The base level, “EV certified,” requires a $500,000 investment and includes repair and maintenance and one DC fast charger, but it can only sell 25 EVs per year.
For around $1 million to $1.2 million, dealers can become “certified elite” and will receive the following:
- Two DC public fast chargers
- Demo units
- Rapid replenishment
- A presence at Ford.com
In December, Farley announced about two-thirds or 1,920 Ford dealers enrolled in its EV dealer program, 1,659 being “certified elite,” and the other 261 are certified EV dealerships. The program will result in one of the largest DC fast-charging networks in the US and will help Ford streamline EV distribution.
However, according to a new report from Automotive News, Ford is working on changes to the program with its dealership network after state associations claim it’s unfair and breaks franchise laws.
Chairman of Ford’s National Dealer Council, Tim Hovik, said the two sides are close to “altering three major aspects of the program,” which include:
- Offering round-the-clock public charging
- Marketing benefits for the lower “certified EV” dealers
- How future EVs will be distributed, including the 25 cap for lower tier dealers
The changes will likely narrow the differences between the two tiers. Hovick added:
I’m confident we’ll come to a place where all sides feel we’re fair and within the boundaries of the franchise laws.
Earlier this month, Lincoln, part of the Ford brand, revealed over half of its dealers opted into Ford’s EV dealer program. More importantly, the 365 that did decide to join account for 88% of the brand’s sales volume.
Ford initially created the Model e program to streamline distribution and get electric vehicles into customers’ hands quicker by simplifying the logistics.
To close the gap and compete with Tesla, Ford will need to get its dealers on the same page. Tesla sells directly to the consumer, skipping the dealership altogether and minimizing costs.
We’ll update you when we hear more about the situation. Stay tuned.
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