September 15, 2022: -Ford Motor asks its almost 3,000 retailers to invest upward of $1 million in upgrades to sell all-electric vehicles as the automaker attempt to cut overhead costs and boost profits at its retailers to align EV-leader Tesla better.
Ford is providing its dealers the option to evolve “EV-certified” under one of two programs with investments of $500,000 or $1.2 million. Executions said that dealers in the higher tier, which carry upfront costs of $900,000, will receive “elite” certification and be allocated more EVs.
Dealers have until October 31 to decide and until the end of the year to make the investments.
It’s an effort to elevate Ford dealers as the company which wants to grow sales across its traditional and commercial businesses and EVs. Tesla and the different electric vehicle startups sell directly to consumers without franchised dealers.
“We’re betting on the dealers. We’re not going to go direct. But we need to specialize,” CEO said on Tuesday.
“The main message I have for the dealers, which I’ve never said before because I did not believe it was true, is that you could be the most valuable franchise in our industry,” he added.
Ford has plans to sell EVs have been a point of contention since the company split off its all-electric vehicle business earlier this year into a separate division called the Model e. Farley added that the automaker and its dealers needed to lower costs, increase profits, and deliver more consistent customer sales experiences.
Ford’s recent lineup of all-electric vehicles includes the Ford F-150 Lightning pickup, Mustang Mach-E crossover, and e-Transit van. The automaker is anticipating releasing a litany of other EVs globally under a plan to invest $50 billion in the technologies by 2026.
Farley is expecting Ford’s retailers to cut selling and distribution to around $2,000 per vehicle to have competition with the direct-to-consumer model.
“We’ve also studied that Tesla very carefully over the last several years,” Farley said.