Dealers Who Forked Out for Ford’s ‘Exclusive’ EV ‘Certification’ Feel Like They Got ShEVved
Ford has had an awfully good quarter on the EV and hybrid side of the business if you only look at the sales numbers the company reported in May.
Ford Motor’s U.S. new vehicle sales rose 11.2% last month compared with May of last year, boosted by strong sales growth for all-electric and hybrid models.
The Detroit automaker on Tuesday reported roughly 65% increases in sales of both hybrid and all-electric vehicles. That’s compared with a 5.6% rise in sales of Ford’s traditional vehicles with internal combustion engines.
“Woot!” right? Pass the champagne?
Not entirely. Those sales still only make up 14% of Ford’s overall volume – not something a company wants to hear that was going to switch their focus to an all-electric footprint. Hybrids are beginning to outstrip EV sales, which is why Ford has delayed the development of any new EV models.
And the worse EV news of all is what the company loses on every one of the electrics it sells – its asterisk.
…Ford reported in April the division lost $1.32 billion on 10,000 vehicles wholesaled from January through March. While the unit also includes EV-related business such as software, those losses equate to a loss of $132,000 for each vehicle the unit sells.
Even in a world of glassy, Green house gassy, grifting government subsidies and unicorn farts, that is unsustainable.
EV progress at Ford has come at a steep price for everyone involved, not just corporate mucky-mucks and the poor sods who were excited to be assigned to the Lightning line before they shut it down a couple of months later.
Dealers who’d paid over half to a million plus dollars to be Ford EV “certified” to be able to sell the all-electric things in what was billed as an exclusive “or else not at all” arrangement were kind of blown away at a surprise announcement out of corporate HQ last week.
Ford yanked the football.
Crazy how Ford required dealers to invest hundreds of thousands to get “certified” to sell EVs
And today discontinued the program on a whim.
One dealer DMd me that they spent over $600K on the certification, and they’re anxious about getting the money back.
Ford claims they…
— Car Dealership Guy (@GuyDealership) June 14, 2024
Businesses that are out as much as more than a million and a half buckarooskies have questions.
Ford ends controversial EV program, shocking dealers
Detroit Big Three automaker Ford (F) is changing the way the brand sells its battery-electric vehicles, with its latest move placing the automaker’s EVs within easy reach of nearly 90% of Americans.
Though the new move can translate to more sales and increased foot traffic for dealers, Ford retailers have mixed reactions, as it involved the axing of a controversial and expensive program that the Blue Oval hung over their heads.
…Originally announced on September 14, 2022, the Model e dealer certification program was designed for the Ford brand to have an edge over EV startups like Tesla, Rivian, and Lucid.
While startups conducted online EV sales and dealt with a limited physical footprint, Ford had an advantage with its dealer network, which it envisioned as a one-stop-shop for EV customers buying, maintaining and charging Ford-branded EVs.
Ford initially gave its dealers until October 31 that year to choose an ultimatum for the potential future of their businesses, which was later pushed to December 2 due to weight of the situation at hand.
Those who wanted into the program could choose one of two certification “levels” that required extensive investment in EV infrastructure equipment and training.
Dealers that wanted to be a Model e Certified dealer needed to invest up to $500,000 in training and charging equipment, while those that opted to be a Model e Certified Elite dealer were looking at an investment of up to $1.2 million. Ford executives said that actual costs for dealerships turned out much lower than their estimates.
Dealers also had the ability to opt out of the Model e dealer certification program, but required them to discontinue selling Ford-branded EVs entirely starting on January 1, 2024.
Dealers who fell for the hype feel like they were sold a very expensive bill of goods.
…As part of the program, Jim Seavitt, owner of Village Ford in Dearborn, Michigan bought two DC fast-chargers, as well as eight level 2 chargers; more than enough EV charging capacity for a dealer his size.
“Given the number of EVs we have sold and will sell in the next year, it’s overkill,” he told The Detroit News. “I thought I had to do it to sell electric. Those that didn’t do it got off the hook. They have to make that part of it right.”
Apparently the exclusive EV insult to injury doesn’t end with a check for the chargers they install or the training your mechs went through, either. You’re enrolled in one of those plans like the TV commercials where they send you a box and a bill every three months whether you want or need it, and good luck trying to cancel that sucker.
Ford originally presented their program tiers to dealerships mid-September 2022 with an October drop-dead date, and there were about 2000 dealers who initially thought they’d give it a go.
…That deadline was later extended to December 2nd, as many dealers complained that six weeks wasn’t enough time for such a major decision. The company offered its dealers three options:
- Become a Model e Certified Elite dealership
- Become a Model e Certified dealership
- Discontinue selling Model e vehicles (all Ford BEVs) effective January 1st, 2024
Of the 1,920 franchises that agreed to become Model e dealers, initially, 1,659 chose to be Certified Elite with full sales and service capability. 261 dealers chose to be Certified with full-service capability, limited sales, and a lower investment cost.
I was told today that currently, about 1,500 dealers are Model e certified dealerships, so about 400 of the initial hand-raisers decided against the Model e business model.
There is no doubt those 400 lucky ducks who fell out at the last moment are lighting candles in praise and giving hugely to charity in thanks for their deliverance.
I’ll bet they were happy, especially right now.
Maybe there was even more to scrapping the program than merely trying to make it easier to offload hugely Ford’s expensive EVs piling up.
…I asked Marin Gjaja, COO of Ford Model e if the decision to end the program only six months after it officially began was because of the intense pushback and lawsuits from dealership associations across the country and was told that wasn’t the case, but it’s hard to believe that didn’t play a major role in the decision to pull the plug.
Sure sounds like everyone was unhappy and states were starting to back the dealer associations that went the legal route.
…According to Business Insider, Dealer dissatisfaction with the high costs of the certification program was evident early on, with several dealer associations filing lawsuits against Ford. An Illinois board ruled in favor of dealers, stating that the program violated state laws. By December of last year, more than half of Ford’s nearly 3,000 US dealers had opted out of the EV investment requirements, indicating the program’s failure.
Yoicks.
I’m no math major – I only play one here at HotAir – but I imagine making good on those “Elite e” etc. dealerships (if and when Ford ever does) will add a buck or two to the already staggering loss they take on every Ford EV they sell.
Hopefully, results in November will mean they won’t be able to look to POTATUS for more bailouts.
It would be nice to catch a break.
Read the full article here