Tesla, Rivian, Lucid, and Fisker are the EV makers that proved the direct sales model is what Americans want. These brands were able to eliminate the middleman and focus on dealing with the sales part themselves. Ford wants to be America's second-most popular all-electric car manufacturer, but will it succeed without revamping its way of doing business?
No matter how much some car buyers may dislike the middlemen, they are a vital part of a legacy automaker's way of selling wheels. Not only do they buy the models the manufacturer wants them to from time to time, but they also take care of everything sales-wise. Test drives, registration, taxes, leasing, financing, inventory handling, and, most importantly, servicing happen at a dealer.
In most cases, this means customers work with a completely separate entity from the company that made the automobile. That's one of the reasons why dealers were able to add outrageous markups and keep this shady practice ongoing even though prospective buyers were complaining about it. Moreover, various sneaky add-ons were almost always pushed by salespeople.
But when Tesla started to become famous and deal with sales itself, those interested in ditching gas-powered vehicles quickly learned that it's possible to get a car without negotiating with a dealership or looking to another state for the vehicle of choice.
This model proved so popular that all newcomers to the electric automotive space adopted it. Go online, pick your car, configure it, place a deposit, figure out the details via email or phone with a customer representative, choose your preferred payment or financing method, and that's it.
Ford understood that it was not Porsche. It couldn't continue letting its dealers set absurd prices. People would've immediately looked elsewhere. It got so bad at one point that Jim Farley was forced to send a public warning regarding the markups.
Coincidently or not, that message came after the Dearborn-based automaker announced that it would split its business into two separate units – Ford Model e for electric vehicles and Ford Blue for fossil fuel-powered ones. The former isn't making any money for now. The division is hemorrhaging funds; a $3 billion loss is expected in 2023. It's not a good look for the time being, but EV potential is high. Post-2030, we might see EVs as the majority in showrooms, while the internal combustion engine-powered cars become the exceptions to the rule.
Photo: Ford.com
But the Blue Oval believes in a zero-tailpipe emission future where models like the Mustang Mach-E and F-150 Lightning top sales charts. That's why Ford CEO Jim Farley announced an important update to dealership pricing – transparent buying costs for EVs available right on the manufacturer's official website.
To give other dealers watching the executive's moves an example, Farley used the Ford Store Morgan Hill to make a point. "Since 2005, their one-price model has been a big hit with customers. Less stress and more trust," said the executive, who is currently on an all-electric journey on the West Coast.
But this isn't looking like a rule that's going to apply to every Ford dealership in the US. Only those part of the Ford Model e division will take part in this new policy. Moreover, it's not even certain that all dealerships joining this division will adhere to this practice.
But what's clear now is that Ford isn't ready to ditch its comprehensive dealer network, which leaves room for other EV manufacturers to keep growing as the adoption of all-electric cars accelerates.
However, it is a good step forward for putting more Americans behind the wheel of a Ford-made EV. Too bad that it's coming next year.
Starting next year @Ford model e dealers will offer upfront transparent pricing on https://t.co/Hldfv84vI0. The Ford Store Morgan Hill is a great example of how dealerships are meeting the increased demand for more EVs. Since 2005, their one-price model has been a big hit with… pic.twitter.com/aNUgFvafvT
Car shows on TV and his father's Fiat Tempra may have been Florin's early influences, but nowadays he favors different things, like the power of an F-150 Raptor. He'll never be able to ignore the shape of a Ferrari though, especially a yellow one. Full profile
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