CEO Farley: Ford is Going to 100% Online, Fixed-Price Sales For EVs

[VTbuckeye]

The Model E "dealers" will look much different from the typical ICE dealer in that they will not need nearly the real estate that a dealer with inventory does. Perhaps they'll only carry used vehicles and a few demos, and they'll retain service facilities for repairs. With fewer sales staff mouths to feed and a smaller footprint, operating costs will be lower, and the "tricks" in financing and ADM and agreed percentage of sales will be more palatable. They'll essentially be dealers in name only, and Ford will likely make them sign agreements to this model if they want to sell EVs.

Honestly though, until Ford gets their EV production up, I can't see this happening for a few years. There just aren't enough Ford EV sales to go around for a dealership to be exclusively EV yet. Restricting allocations for "bad behavior" will be Ford's weapon of choice in the meantime. In a way that sucks for the consumer since you don't know if a dealer has been black flagged for charging ADM until it's too late and their reservation is delayed for conversion to an order..

Ideally Ford could reach out to customers (they have the contact info) and let them know that their dealer is on the naughty list and may not be getting the allocation anticipated. Then the customer can move their reservation.

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[beatle]

That's a good idea. Or conversely they could maintain a list of well-behaved dealers that people can reference. They could use the data from the Lightning sales as a starting point, and then poll their dealers with a gentleman's agreement to adhere to the no-ADM model as a means to secure more orders.

 

[Amps]

Restricting allocations for "bad behavior" will be Ford's weapon of choice in the meantime. In a way that sucks for the consumer since you don't know if a dealer has been black flagged for charging ADM until it's too late and their reservation is delayed for conversion to an order..

I don't think reservation to order conversions count towards future allocations. I'm speculating because that's the way VW did it in a process that has been quite similar to Lightning reservations.

The only way a dealer could get ID.4 to sell from inventory was from abandoned orders once the vehicle actually arrived on their lot. They'd almost give free pedicures until the truck arrived. Then, it gave them a perverse incentive to make the reservation holder go through the typical dealer hell just to buy the car at MSRP. The dealer basically dared me to walk away. VW adopted a similar policy as Ford has of threatening future allocation punishment for ADM shenanigans to order holders. Even though you walk in with a checkbook or off-lot financing, dealers can make the transaction a painful experience.

I wish I could have X planned Lightning.

 

[FordLightningMan]

Ford making people sign something saying they won't sell their vehicle in a year is a good start too, but it's not far enough. There should be a monetary penalty for breaking that rule. My grandmother was lower income and had work done on her house, she had this paid for by a state program. If she sold the house in less than five years, she had to pay it all back. Maybe the "don't sell for one year" contract should also say "resale cannot be over MSRP" for three years. If you sell over MSRP, then you have tangible fiscal consequences.

Stopping the dealers isn't enough. The backlog on order banks is many years long for anything in demand, mostly from people who don't need vehicles. There is 5+ years of Cybertruck backlog, I know MANY people who have multiple on order with the sole intention to flip. Dealers are scummy for sure, but resellers are much much much worse. Wait until people are writing scripts and bots are in place for the next EV reveal. Your reservation 30 seconds after the preorder goes live will be #500,000 in the queue.

Someone will be buying the next hot vehicle, driving it only until the next NEXT hot vehicle is ready, making $20k per flip and exclusively be in new top of the line vehicles paid for by the poor people they are reselling to. I already see people on here doing that with their Bronco, the same people who won't dare pay dastardly ADM, before they go screw someone.

 

[Granger Ford]

While I agree its a good thing it might cost me $1000 since @Granger Ford is selling below MSRP.

But destination and delivery is $1,696 (or $1,795). If you can pick it up we can hope that fee will be gone as well!

I think in today's environment with dealers raising prices above MSRP, it is easy to lose sight of the value of the franchise system. Competition amongst dealers in 99% of the cases causes a "race to the bottom" for car dealerships. We've figured out innovative ways to make it possible as a franchise dealership, but if you buy direct like Tesla, there are no "deals" to be had.

 

[Skidrowe]

I think in today's environment with dealers raising prices above MSRP, it is easy to lose sight of the value of the franchise system. Competition amongst dealers in 99% of the cases causes a "race to the bottom" for car dealerships. We've figured out innovative ways to make it possible as a franchise dealership, but if you buy direct like Tesla, there are no "deals" to be had.

I love me a good deal! It makes me feel all warm and fuzzy about my purchase.

 

[Tenetke]

If I bought directly from Ford it would have saved me from a $10k ADM. It was a condition they placed after I placed my order through my Ford account for them to accept the order. I had no recourse since if I didn’t sign I’d lose my order and the Lightning would become the dealers. I don’t intend to flip the vehicle either. There are two dealers where I live and I chose the wrong one after listening to the salesperson promises. Unfortunately, I’m not one to screw someone else out if money like the examples given here by flipping it.
One difference between Ford and Tesla is that Ford currently has more dealerships with service centers. Surely if they’re planning on going direct to customer sales they’re working on the ability to take that vehicle to a Ford dealer/service center for repairs or maintenance.

 

[astricklin]

TX and many other states have laws that have protected these dealers for years and years. This is why Tesla can't sell direct in TX. We buy while the car is still in CA, make payment and then the car is shipped to TX. Officially per laws, Ford would have to do the same thing since a manufacture can't sell direct. So here is hoping that Ford is ready to join that fight to have some old laws wiped away or they have some plan to just handle the sale along with or for / through the dealer, but just make it online and easy.

What's even more stupid is any Tesla vehicle manufactured in Texas must leave the state before being delivered to a customer in Texas.
Customers in Texas need to start putting pressure on politicians to change this law.

 

[Nick Gerteis]

Once the dealer is gone, you just have a bunch of resellers snatching up the vehicles and adding their own "ADM." I have seen this regularly with vehicles in my area, people order with the intention of reselling, which you can do for a few vehicles per year without being deemed a dealer. It boggles my mind that so many people on this site are disgusted by ADM, but then talk about reselling, which in my opinion is even more sleazy than a dealer.

The only way to beat resellers in a direct sales model is to have supply meet demand, but I don't think any manufacturer wants to sit on a mountain of stock anymore. Due to this, vehicles will be just like Playstation 5 and limited edition sneakers once direct sales model is in full force. You won't be paying ADM to the sleazy dealer, you'll be paying it to your sleazy neighbor. Then you'll get the added bonus of having fewer certified service centers around afterwards, once the dealerships fold.

Pure conjecture.

 

[Nick Gerteis]

Ford making people sign something saying they won't sell their vehicle in a year is a good start too, but it's not far enough. There should be a monetary penalty for breaking that rule. My grandmother was lower income and had work done on her house, she had this paid for by a state program. If she sold the house in less than five years, she had to pay it all back. Maybe the "don't sell for one year" contract should also say "resale cannot be over MSRP" for three years. If you sell over MSRP, then you have tangible fiscal consequences.

Stopping the dealers isn't enough. The backlog on order banks is many years long for anything in demand, mostly from people who don't need vehicles. There is 5+ years of Cybertruck backlog, I know MANY people who have multiple on order with the sole intention to flip. Dealers are scummy for sure, but resellers are much much much worse. Wait until people are writing scripts and bots are in place for the next EV reveal. Your reservation 30 seconds after the preorder goes live will be #500,000 in the queue.

Someone will be buying the next hot vehicle, driving it only until the next NEXT hot vehicle is ready, making $20k per flip and exclusively be in new top of the line vehicles paid for by the poor people they are reselling to. I already see people on here doing that with their Bronco, the same people who won't dare pay dastardly ADM, before they go screw someone.

I just can not with your doom and gloom. Pathetic.

 

[Sam James]

I don't think reservation to order conversions count towards future allocations. I'm speculating because that's the way VW did it in a process that has been quite similar to Lightning reservations.

The only way a dealer could get ID.4 to sell from inventory was from abandoned orders once the vehicle actually arrived on their lot. They'd almost give free pedicures until the truck arrived. Then, it gave them a perverse incentive to make the reservation holder go through the typical dealer hell just to buy the car at MSRP. The dealer basically dared me to walk away. VW adopted a similar policy as Ford has of threatening future allocation punishment for ADM shenanigans to order holders. Even though you walk in with a checkbook or off-lot financing, dealers can make the transaction a painful experience.

I wish I could have X planned Lightning.

I had an extremely pleasant experience with our VW dealer. We were still waiting on our original order (now a 2022 and crossing the Atlantic) and our dealer called us as soon as they had one on the truck. Day it came in we bought it at MSRP with absolutely no hassle. The dealer actually called us to let us know one was coming in with no prompting from us… I still can’t get over that in this day and age.

Also happy with my pricing through Granger.

I don’t want to see the good dealers suffer through the transition and hope Ford and other manufacturers fairly compensate them. All other dealers, like our local Corwin Ford can DIAF.

 

[Regular150]

As some one who has had several Teslas the no dealer thing sounds great right up until you need roadside assistance or repairs and your car from their centers.

I really enjoy(ed) our Tesla products but when they can’t fix it with the rangers in your driveway, the service center is 90 mins away and they aren’t fans of loaner vehicles service can be a pain in the butt. My son also had an issue in Tallahassee, FL and roadside said they could get to him in 3 days.

Dealers aren’t awesome, I get it, but there’s gotta be something better than what Tesla does.

Just for the record, I agree their must be service locations what you call them I don't care, but no place for warranty work is a non starter. No pun intended.

 

[Kev12345]

props to jim farley. he gets EV's are the future and the new generation of buyers don't want to deal with middlemen. configure and purchase on my phone just like tesla. no haggling. i love it. Ford will not have a kodak/nokia moment after all.

 

[GDN]

The key about service and Tesla is the number of things they are able to do in the field and there is nothing like not having to show up and worry about leaving your car early in the morning and then not having transportation for the day. Tesla isn't the best about their scheduling, but I've had 3 or 4 very good experiences. They come to me, make the repair right in my garage. The appointments made online, payment made online if needed.

So think about this, although Ford says they can service the batteries, it will not happen often. First it shouldn't be needed, second if it is, early on, I'm trusting they just replace the battery and then send the original back for review to improve their build process. Same for the motors, rarely should they need to be opened up. We are entering a different world of service and repair. If you take the full drive train out of the picture the vast majority of other items can be done easily almost anywhere. I have nothing to say that Ford is moving to a mobile repair model, but there are some big advantages to it.

 

[FordLightningMan]

Tesla does no mobile repairs near me. I think this is only done in areas with Tesla critical mass. If Tesla came to my house on any of my service calls, I'm sure I'd have a different opinion of their no dealer model. Rather, I need to drive inconveniently far and take a day off of work to see a repairman. I've never had to do this with any of my vehicles in the past, I always dropped off at the local dealer before work.

I don't think Ford will scale back to anywhere near as few certified service centers as Tesla has. Since I live in a decent sized city, I don't have fear I will lose my dealer or service center. I just feel bad for Ford owners in small to medium sized towns, who may need to make the same type of Tesla commute I have to make now, after their local Ford dealer closes. Farley already said dealers won't all survive, this is almost guaranteed to happen.

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