Nearly two-thirds of U.S. dealers agreed to make the investment that Ford is requiring for them to sell EVs, and some are finding costs to be less than expected.


KC_and_FARLEY-MAIN_i.jpg

MARVIN SHAOUNI

Ford CEO Jim Farley, right, with Automotive News Publisher KC Crain at the Detroit Congress, said 1,659 of 1,920 dealers who signed up chose the Certified Elite track.

Advertisement
Submit your 2022 Austin Neighborhood Feedback

DETROIT — Even as Ford Motor Co. faces litigation over its electric-vehicle certification program for dealers, roughly two-thirds of its U.S. retail network has bought in to the plans, and some are finding that costs could be lower than advertised.

Ford CEO Jim Farley, speaking last week at the Automotive News Congress here, said 1,920 dealers had agreed to follow the rigorous new sales standards and invest heavily in EV chargers and training. He said 1,659 dealers chose the Certified Elite track, which requires investing as much as $1.2 million, while 261 chose the Certified status, which requires up to a $500,000 investment but caps their EV sales at 25 a year.

The automaker, which has about 3,000 dealers in the U.S., views the upgrades as critical to challenging Tesla’s leadership in EV sales. Ford is the nation’s second-largest EV brand this year, according to Experian registration data.


“The future of the franchise system hangs in the balance here,” Farley said. “The No. 1 EV player in the U.S. bet against the dealers. We wanted to make the opposite choice.”

Still, the program faces growing opposition in a number of states.

Ahead of Ford’s Dec. 2 opt-in deadline, dealers in New York sued, and Illinois dealers filed a protest with the state’s motor vehicle board. In Connecticut, Democratic U.S. Sen. Richard Blumenthal and state lawmakers have voiced displeasure over what they say are excessive costs that potentially violate state franchise laws.

Ford has consistently said it believes the program, developed with input from about 400 dealers from a monthslong “listening tour,” does not violate state laws. Farley last week said tweaks could be made but that the major pieces of the program — including that dealers sell EVs at no-haggle prices and carry no inventory — will remain in place.

“We want to work with our dealers,” Farley said, “but there are certain things our customers want that are nonnegotiable.”

Advertisement
Submit your 2022 Austin Neighborhood Feedback


Greg Balasco, owner of Lakeland Automall in Florida, which includes a Ford store, signed up to become Certified Elite.

He said it was important that his store be able to sell all Ford vehicles. The automaker is allowing only certified dealers to sell EVs beyond next year, a concern for many of the state associations opposing the program.

“I think that being able to serve all people something will be important for the future,” Balasco told Automotive News. “Being prepared for electrification is the smart thing to do.”

Balasco said he already has received some estimates on costs to install and operate the chargers Ford is requiring. All-in, he’s looking at expenses of about $350,000 — less than a third of what the automaker projected.

“It’s nowhere near the numbers Ford put out there,” he said.


Eddie Stivers, dealer principal at two Ford stores in Alabama, received similar quotes.

He said chargers for his store in Montgomery will cost “significantly less than half” of the $1.2 million Ford estimated, although he’s still waiting on quotes from his utility company.

At his other store, in Birmingham, he plans to install more Level 3 direct-current fast chargers than the minimum of three, and his quotes are still coming in below Ford’s estimates.

Advertisement
Submit your 2022 Austin Neighborhood Feedback

Stivers, president of a holding company that operates five dealerships selling 10 brands, said he gave input as part of Ford’s “listening tour” and appreciated the company’s transparency.

“I would put Ford’s plan at a much higher level, and certainly more coherent, than many of the OEMs,” Stivers said. “It’s not all roses, but it is certainly a well thought-out, well-done plan.”


Not everyone agrees.

The New York dealers suing Ford argue that the provision in the program barring uncertified dealers from selling EVs is unlawful.

“Every dealer under the current franchise agreement has a right to every Ford vehicle manufactured with that nameplate on it, to include the newest EVs,” Rich Sox, one of the attorneys representing the dealers, said in an interview. “They have a right to their fair allocation of those vehicles based on their market size, sales history, etc. This is about making sure all dealers have access to EVs and not being pigeonholed into one of three categories the program arbitrarily created.”

Ford has argued that it plans to continue investing in gasoline-powered vehicles under its Ford Blue business unit so dealerships that do not sell EVs can continue to be successful.

“A dealer that loses the ability to sell and service EVs — the future of the automobile industry — will soon find itself unprofitable and eventually out of business,” the New York dealers wrote in their lawsuit.

The Illinois protest, as well as a complaint filed with Arkansas’ motor vehicle commission in October, raises similar points.

Advertisement
Submit your 2022 Austin Neighborhood Feedback

“Ford is intentionally withholding new and potentially profitable products from dealers, to which they have an existing contractual and statutory right, unless dealers accede to the extreme, unreasonable, and anti-franchise conditions on which Ford is insisting,” the Illinois dealers said. “To be sure, there is nothing ‘voluntary’ about Ford’s unlawful take-it-or-leave-it program.”

Despite the opposition, Farley last week said he didn’t regret the rollout of the program.

“There’s always a better way,” he said. “But I don’t think we made, really, any big mistakes.”


Sign up for free newsletters

Digital Edition

Automotive News 1-2-23

Fixed Ops Journal

Fixed Ops Journal 12-19-22