The Blue Oval is getting pushback from dealers that don't want to invest in electric vehicles.
Earlier this year, Ford announced that it would be dividing its automotive business into two parts. One would be called Ford Blue and would revolve around combustion-powered cars, and the other would be Model e, a division focused on electric vehicles. Ford Pro, for commercial vehicles, would continue.
In September, the Blue Oval announced that dealers would have to invest in one of two tiers of EV-specific options under Model e: Certified and Certified Elite. Originally, Ford wanted dealers to choose the end of last month but recently moved that deadline to early December.
Now, Automotive News reports that dealer associations in at least 13 states are pushing back, saying that Ford is unfairly burdening its retail network and breaking franchise laws. To understand the concerns these dealers have, we need to look back at what they'd be expected to spend.
If a dealer chooses the Model e Certified Elite tier, it must invest $900,000, some of which will be spent on two DC fast chargers. One of these chargers has to be in view of the public, and by 2026, another fast charger must be installed as part of an additional $300,000 investment. For that princely sum of $1.2 million, Elite dealerships will get demo vehicles and can carry limited stock.
Model e Certified is considerably cheaper but still requires $500,000 for one public-facing fast charger and other training and sales materials. Due to the lower cost of entry, Model e Certified dealers won't receive inventory or demo models and will be able to sell no more than 25 EVs annually.
Until certification, these dealers won't be able to sell vehicles like the Ford F-150 Lightning, although they will still have access to the Blue Oval's combustion-powered offerings.
Some of the state associations say that a cap on the number of EVs a dealer can sell is illegal. In a resolution, members of the Southern Automotive Trade Association Executives (which represents 12 state dealer associations) said that 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," adding that it wants Ford to "work with state association executives and franchised dealers to create a program that complies with the state laws, promotes competition, and furthers the goal of EV adoption in all parts of the country."
Additionally, the CEO of the Pennsylvania Automotive Association, John Devlin, said in a letter to Ford CEO Jim Farley that this Model e certification program "violates multiple provisions of Pennsylvania law."
On the other side of the coin, Ford has explained that the Model e Electric Vehicle Program was the result of the company engaging with and listening to roughly 400 dealers, noting that "dealers may also choose not to enroll in the voluntary program and specialize in Ford's industry-leading ICE portfolio of retail and commercial vehicles."
Tim Hovik, the chairman of Ford's National Dealer Council, said, "The evolution of where we finished versus where we started was a direct result of dealer input," adding, "I feel there are pieces of what we rolled out that are useful and can be effective, but I also think there are a lot of pieces that can have tweaks." Ford says it is confident in the legality of the plan and says that "overall feedback has been positive."
The program currently makes provision for a second opt-in date for dealers in 2027, which seems to be a nice concession to those that want to wait to see how much demand EVs will have in the coming years.
Some dealers feel that they are being forced to pay for infrastructure that they don't need, as public chargers will eventually become very commonplace. Ford, on the other hand, doubtless wants to market the availability of EVs and charging to all who pass by, not just to sell electricity to customers who have EVs but to make it clear to the public that the brand has invested in the alternative form of propulsion.
There are clearly still a number of alterations to be made to the program, but the good news is that Ford is willing to listen to these dealers and the dealers are not particularly upset - they just want the program to be altered in a way that won't severely impact them. The specific laws of each state will play a role, but if Ford wins this battle, other automakers will surely follow suit with EV mandates, which could force dealers to close. Is that a bad thing? Discuss.