Ford has announced that Ford dealers will have an extra month to consider before the deadline to invest in the brand’s EV future.
Ford made the news earlier this year for aggressively revitalizing its dealership system in the U.S. In short, while the company sees the benefits of having such a widespread dealer network, the auto giant also wants to remain price competitive with new direct-to-consumer options. To do so, they have made a demand of their dealerships; invest in an electric future or be cut out of it. According to Automotive News, dealers now have an additional month to decide on their future, giving them until the end of November to choose.
Ford’s new deal with its dealers is a relatively simple one. To sell Ford electric vehicles, a venture that has become incredibly profitable, a dealer must become “certified” with Ford corporate. A basic certification requires dealers to invest a small amount into EV charging at their facilities, but in turn, grants them a minimal number of electric vehicles annually. However, dealers can opt to invest more into the project and hence can receive more allocations for electric vehicles via higher levels of “certification.”
For dealers that choose not to certify, they will be given no allocations for electric vehicles, and in all likelihood, they will eventually be cut off from Ford entirely.
This is the first in a long line of expected changes as Ford hopes to modernize their system, likely moving to a minimal inventory model at their dealers, but this first step will be an important one. And while this may seem like an obvious decision to some, dealers are required to invest over $1 million at the top level of certification. For smaller dealers, this is an investment that is not exactly straightforward. Hence Ford’s decision to extend the deadline.
The decision to postpone is likely done to incentivize the highest number of dealers to join the program. Other brands such as Buick, Cadillac, and even Ford’s own Lincoln brand have seen dramatic drops in the number of operating dealers after instituting buyout options for dealers not interested in an electric future.
It remains unclear what percentage of Ford dealers will accept the electric certification option. One of the most significant advantages the brand has over direct-to-consumer brands is its enormous national presence. Without that, the company may face an uphill battle in selling its electric vehicles.
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