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65% Of Dealers Say Yes To Ford’s No Haggle EV Sales Policy

Some Ford dealers and state dealer groups are pushing back against the company’s plan for selling electric cars.

Back in September, Ford CEO Jim Farley delivered an ultimatum to its dealers. If you want to sell our battery-electric cars and trucks, you will have to commit to making certain upgrades at your dealership. Furthermore, you will need to agree to a “no haggle” sales process. “When it comes to selling battery electric Ford products that are part of the new Model E division, you’re either on the bus or off the bus and you have just 6 weeks to decide,” Farley said.

Ford has restructured its business recently by separating its operations into three divisions — Ford Blue Oval for traditional vehicle sales, Ford Pro to cater to commercial customers, and Ford Model e to focus on battery-electric vehicles. All Ford hybrid and plug-in hybrid models will be marketed by the Blue Oval side of the business.

Most Ford Dealers Approve EV Sales Changes

Speaking at the Automotive News World Congress this week, Farley said 1,920 Ford dealers have enrolled in the Model e program for 2024-2026, according to the Detroit News. Of those, 1,659 opted into the highest level, “certified elite,” which gives them full sales and service capabilities and requires a higher investment level. Another 261 dealers opted to become “certified” with full service capability, a cap on how many EVs they can sell, and a lower investment requirement.

Ford has about 3,000 dealers in its franchised dealer network in the US. Those who didn’t sign up this time around will get another opportunity to do so in 2025. “We’re betting on the franchise system. Now the largest luxury brand in the United States [Tesla] didn’t,” Farley said. “And we’re betting on the dealer council process.”

Wedbush analyst Dan Ives said the response from Ford’s dealers is a big boost for the company’s EV ambitions. “This is a great sign for Ford to have massive dealer buy in on the EV strategy. A vote of confidence from the dealer network is huge for Farley & Co. on EVs.”

Pushback From Dealer Groups

Not all dealers are happy with the new sales program. Some dealers and trade groups have expressed concerns about the amount of spending required for EV charging infrastructure, questioned how they’ll recoup their investments, and argued that some of the program’s provisions run afoul of state franchise laws. Four dealers in New York have sued Ford over the changes.

The cost of installing the EV chargers — including the public Level 3 DC fast chargers Ford wants its dealers to have — could be as high as $500,000, according to some estimates. [Oddly, Tesla spends nothing like that for one or two Superchargers. These dealers need to do a little shopping around. There are also federal subsidies available to help out.]

That has gotten the attention of Senator Blumenthal of Connecticut, who wrote to Farley recently to say that implementing the program as planned would be “antithetical to consumers’ interests.”

“It is unreasonable to expect that all dealers, in just a few months, are able to commit to hundreds of thousands of dollars in investments that could take years to see the returns of. Fewer Ford Model e dealers lessens competition and consumer choice. Consumers should not be punished for Ford imposing on its dealers requiring high cost investments,” Blumenthal wrote. The senator clearly does not understand that dealers are not required to sign on to the Ford program. Doing so is their free choice. Freedom isn’t free, Senator, as you of all people should know.

Ford executives have said publicly that they view the company’s dealer network as a competitive advantage, given its scale and the opportunities around service business that it brings. But they’ve also said that changes to Ford’s sales model are needed. With the Model e standards, they aim to deliver efficiencies driven by changes such as e-commerce and digital opportunities, reducing ground stock and “evolving” dealer margins.

The program also has requirements around training dealership employees, and providing new physical and digital services for customers. Ford is also requiring certified elite dealers to maintain pricing consistency and to sell EVs for the initial asking price.

“We don’t know what we don’t know. How I saw this decision is, it’s kind of the future of the franchise system hangs in the balance here,” Farley said Monday. “The No. 1 EV player in the U.S. bet against dealers. And we wanted to make the opposite choice. But we know the customer experience has to evolve, because most of these people are new to us.” 60% of Ford EV sales are conquest sales, meaning the customers owned a different brand of car or truck before deciding to buy an electric vehicle from Ford.

Tim Hovik, owner of San Tan Ford in Arizona and chair of Ford’s National Dealer Council, told Detroit News he views the initial wave of dealer enrollments as a first step and that he expects more dealers to come on board in the second enrollment period three years from now. It would make sense, he said, that high volume dealerships — particularly those in states with zero-emissions vehicle programs — opt in now, while smaller dealers in rural areas for now focus on combustion engine products like the F-150 and Bronco.

“My message has been clear to the state associations: I appreciate what the associations do. They represent the franchised dealers in their states and they do really good work. But I disagree a little bit with them in this instance,” said Hovik. “I think we will do much better working within the framework and together with the company. The blueprint that they announced in Las Vegas may not be perfect, and there’s a lot of work that we’re doing between now and when we implement it, but none of that would matter if Ford hadn’t come out and endorsed the franchise system.”

Farley suggested that some of the opposition may be driven by non-Ford dealers: “I think most of the state associations that have challenged what we’re doing … is actually a lot of non-Ford dealers who aren’t sure what their manufacturer is going to do.”

Preparing For Tomorrow

Rhett Ricart, CEO of Ricart Automotive near Columbus, Ohio, enrolled as a certified elite dealer and thinks Ford’s standards are in line with where the industry is headed, driven by changes consumers are demanding.

“I think they’re going to have a lot of (dealers) complain about it, but in the grand scheme of things, they’re all going to jump on board. Because that’s where we’re headed. All these manufacturers aren’t putting billions of dollars in electric vehicles because they might just want to make a couple of them. They want to make these things in volume,” he said. “I think Ford spent a lot of time thinking this through. They talked to a lot of dealers. They’re coming up with the best proposal they can to be able to shift dealers into the 21st century, which is now this new electrified movement.”

Over the years, dealers have always been obligated to purchase special tools and send their service technicians to be factory trained. Both can be expensive, but are necessary in order to do business. Get over yourselves, people.

If dealers choose not to get on board with the EV revolution, that’s fine. But soon they will find themselves on the outside looking in and wondering how they missed the boat. Opportunities are only worthwhile if people take advantage of them while they are available. Ford’s electric vehicle sales are ramping up nicely. It’s now or never for dealers.

 
 
 
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Steve writes about the interface between technology and sustainability from his home in Florida or anywhere else The Force may lead him. 3000 years ago, Socrates said, "The secret to change is to focus all of your energy not on fighting the old but on building the new." Perhaps it's time we listened?

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