Ford tweaking Model E dealer program to address dealer concerns
Ford’s been working on its strategy and sales reorganization for a couple of years, the initiative that created the Blue (ICE), Pro (commercial), and Model E (electric) divisions. On the Model E side, part of continuous reworking of the EV arm has been in response to dealer lawsuits filed in numerous states, since Model E not only stipulated investments of anywhere from $500,000 to $1.2 million, the automaker initially wanted dealers to set no-haggle pricing, offer remote pickup and delivery for service appointments, and build chargers that would operate around-the-clock. Another big part of the tweaks to Model E is the continually unstable ground the entire electric project is built on. As part of understanding what dealers are facing and how to keep the electric wheels turning, Automotive News reports that the automaker held 11 meetings with dealers this year in six cities. Based on the feedback, more changes are coming to Model E as soon as next month.
During the roadshow, Ford told dealers to pause their investments into getting certified for Model E. This directive followed a corporate change in plans as Ford pulled investments in battery-electrics in favor of consumers’ choice for hybrids. The head of Ford Blue — the internal-combustion-powered division that, with Ford Pro, has been paying the bills as Model E posts big losses — told AN, “We don’t want them to make any decisions between now and the middle of June, when you can maybe have a more informed decision-making process based off what we work out with council in the next few weeks.”
One change has already been made public, the VP of EV programs telling an AutoNews business conference audience, “What we’re finding is more dealers want to be involved in it and we don’t want to be exclusive to just a handful, and so we’re making a change where we’re opening up that and not requiring as many certifications or investments for a dealer to participate in the EV revolution.” Don’t take that comment as a revelation; since the beginning, dealers complained about being excluded and needing to throw so much money at the program. Take that comment as Ford needing to find a better way in the “rapidly changing” environment.
The official list of updates won’t come until next month, when Ford meets its dealer council, and it should touch on topics beyond EVs. That Ford Blue honcho told AN meetings covered “simplifying and reducing complexity,” Ford Credit, floorplan assistance, “longer-term remote experiences,” warranty costs, and more.
CEO Jim Farley attended all eleven meetings, this is that important to the carmaker. Chief Financial Officer John Lawler said last March that Wall Street needs to view Model E like a startup and give it the same leeway regarding profitability. For instance, starting from Teslas founding in 2003, the Model Y maker didn’t post a full-year profit until 2020 — 18 years of red ink annually. Wall Street continues to ignore Lawler’s request, though, so Farley’s got to be out in front to explain Model E’s anticipated $5.5 billion loss for 2024 — following roughly $10 billion in losses on the EV side over the past three years — and how he’s turning it around.
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