Ford sets 5 new requirements for EV dealers - including remote delivery, fast chargers & non-negotiable pricing

[greenne]

https://electrek.co/2022/09/14/ford-sets-new-dealers-requirements-in-order-to-sell-evs/

Five new pillars for Ford dealers to sell EVs
With these new dealer commitments, Ford is laying the foundation for a bright future in EV sales, not only in retail, but online as well. In a sit down with a small group of media yesterday, Ford executives from all three divisions, as well as CEO Jim Farley, presented the future of Model e dealerships, built upon five pillars. He explained:

We’re betting on the dealers, we’re not going to go direct. But we need to specialize. We do that with unique standards.

Here they are:

• Training:
  • Specialized EV teams that are knowledgeable across sales and ownership
  • EV University to train dealers and subsequently, customers
• Charging:
  • Back-of-house charging infrastructure to support sales, maintenance, and care
  • Public DC fast chargers available on Blue Oval Network (see more below)
  • 96% of the US population lives within 20 miles of a Ford dealer, 85% live within ten miles – by implementing fast chargers at dealers, it helps ensure customers always have somewhere to charge their EV, even if they don’t have their own home to do so
• eCommerce:
  • Transparent, non-negotiable pricing
    • To be clear, dealerships still set the pricing, that’s the law. However, Ford wants pricing to be consistent and fair for its customers and said it will be monitoring the process from entry to exit to ensure that the customer signs on the dotted line for the same price as originally promised on day one.
    • Ford says it will be surveying customers post sale and monitoring the consistency of prices across different customers at each dealer
  • Opportunity for the greatest customer satisfaction
  • Ford told us it saw online orders jump from 6% to 50% in one year
• Physical Experiences:
  • Remote delivery available to all Model e customers
  • Pickup and delivery offered with a loaner to all Model e customers
• Digital Experiences:
  • Software and subscription opportunities available
  • Ford Pass perks

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[cvalue13]

Sounds anemic to me. Comes across mostly as marketing fluff where the buying/dealer elements are concerned.

The one thing of some interest, but unclear importance, is fast charging at dealerships. They dive right into talking about how many dealerships exist total, but say nothing about how many of those dealerships will be “Model e” certified with fast chargers actually installed - or what ramp up timing might be.

So really, on all counts, not too exciting or impressive. Sound like 90% more of the same, to the skeptical.

 

[greenne]

I am really interested/focused on this--
"
Transparent, non-negotiable pricing

• To be clear, dealerships still set the pricing, that’s the law. However, Ford wants pricing to be consistent and fair for its customers and said it will be monitoring the process from entry to exit to ensure that the customer signs on the dotted line for the same price as originally promised on day one.

If all e-dealers have to disclose price(no games, no gimmicks, no last minute BS) then customers can confidently cross shop dealerships for best price..or at the very lease assume they won't be held hostage at the last minute by an undisclosed ADM.

It *also* gives ford a mechanism to punish dealers that don't honor commitments to customers. Right now that is the biggest problem besides low supply(allocations).

I actually see this potentially working better than direct sales. For example, if Dealer A has to disclose price and honor it, he/she may throw in additional benefit to keep you from going to Dealer B. Competition is a good thing if it is regulated to ensure everyone plays by the rules...

 

[sotek2345]

I am really interested/focused on this--
"
Transparent, non-negotiable pricing

• To be clear, dealerships still set the pricing, that’s the law. However, Ford wants pricing to be consistent and fair for its customers and said it will be monitoring the process from entry to exit to ensure that the customer signs on the dotted line for the same price as originally promised on day one.

If all e-dealers have to disclose price(no games, no gimmicks, no last minute BS) then customers can confidently cross shop dealerships for best price..or at the very lease assume they won't be held hostage at the last minute by an undisclosed ADM.

It *also* gives ford a mechanism to punish dealers that don't honor commitments to customers. Right now that is the biggest problem besides low supply(allocations).

I actually see this potentially working better than direct sales. For example, if Dealer A has to disclose price and honor it, he/she may throw in additional benefit to keep you from going to Dealer B. Competition is a good thing if it is regulated to ensure everyone plays by the rules...

Agreed, and remote delivery makes this even more interesting.

 

[cvalue13]

If all e-dealers have to disclose price(no games, no gimmicks, no last minute BS) then customers can confidently cross shop dealerships for best price..or at the very lease assume they won't be held hostage at the last minute by an undisclosed ADM.

thats the optimist’s read of it, for sure. I’m more glass half empty.

I’m confused, though, as to exactly what about this is being described as “non-negotiable” pricing? If all it means is that the dealer posts a price that it doesn’t go up or down from, then is the customer left with only the option of finding an alternative dealer?

Because, to me, the MSRP (or a price just above or below it) being “non-negotiable” doesn’t address the areas where dealers continue to seek profits: F&I, dealer add-ons, 3rd party financing arbitrage, manufacturer-to-dealer holdbacks/incentives, and - perhaps most importantly - trade-in valuations.

Im probably thinking about this wrong, but for the average buyer for the average car, I’m not sure how transformative it is merely for dealers to be held to their advertised prices for vehicle being sold?

 

[greenne]

thats the optimist’s read of it, for sure. I’m more glass half empty.

I’m confused, though, as to exactly what about this is being described as “non-negotiable” pricing? If all it means is that the dealer posts a price that it doesn’t go up or down from, then is the customer left with only the option of finding an alternative dealer?

Because, to me, the MSRP (or a price just above or below it) being “non-negotiable” doesn’t address the areas where dealers continue to seek profits: F&I, dealer add-ons, 3rd party financing arbitrage, manufacturer-to-dealer holdbacks/incentives, and - perhaps most importantly - trade-in valuations.

Im probably thinking about this wrong, but for the average buyer for the average car, I’m not sure how transformative it is merely for dealers to be held to their advertised prices for vehicle being sold?

I think this will take ADM (especially surprise ADM) off the table. Although distasteful, dealer add ons, dealer prep, and the like are *less* of a problem if they have to be exposed clearly on the online pricing. In that case the customer can demand they be taken off the price before they commit OR the customer can choose a dealer who doesn't have those fees and take their business to the competition. Trade in is still a problem here.. but that is a tough issue to tackle.

The factor that will either make this work(or not) is IF you as a consumer can easily take your reservation allocation to a new dealer. IF the reservation is not tied explicitly to you, then the same dealer games will be played because the dealer knows you have everything to lose if you go to another dealer. If the allocation is tied to you(or supply is such that alllocations are not needed-- like you order say an Explorer or Expedition today at a dealer) then the dealer loses something if you take your business elsewhere.

 

[Roy2001]

Simply get rid of them from ordering and price setting, when possible. Also allocate less to those states with stupid dealer protection law.

 

[cvalue13]

I think this will take ADM (especially surprise ADM) off the table.

that seems to be the thrust of it, which to me is full of implication

For ADM to continue to be a material issue to address, the implication seems to be that Ford will continue the current trend of keeping supply so low that ADM could otherwise be supported by the market.

Perhaps that is exactly the new model: EVs will be primarily custom order, and there will be enough of a que to order that some would be otherwise willing to pay an ADM.

So, with this announcement, Ford is basically previewing this intended environment and saying “here’s how we’ll minimize ADM tomfoolery given our plans to have long wait times for BEV vehicles.”

 

[O’Majestic1’slightnigF150]

Have to start somewhere. Ford will never get there unless they begin. Crawl Walk Run.

I’m looking forward to the pure digital experience and key toss delivery.

 

[greenne]

that seems to be the thrust of it, which to me is full of implication

For ADM to continue to be a material issue to address, the implication seems to be that Ford will continue the current trend of keeping supply so low that ADM could otherwise be supported by the market.

Perhaps that is exactly the new model: EVs will be primarily custom order, and there will be enough of a que to order that some would be otherwise willing to pay an ADM.

So, with this announcement, Ford is basically previewing this intended environment and saying “here’s how we’ll minimize ADM tomfoolery given our plans to have long wait times for BEV vehicles.”

It could also be a function of time.

Lets say you arrive a dealer tomorrow and they spring ADM on you. Outside of getting Ford involved you are really in a bind. The choice is pay the ADM or decline your truck. If the choice is decline then it is likely you may not get another chance to order for several months(if not years).

If Ford can make enough EVs to support all orders then you would still be forced to decide whether to take the Lightning NOW or wait another 4-6 month turnaround for Ford to schedule your order, build order, ship it to new dealer, etc.

Although not as much of an issue as scenario#1, having to wait longer may force some buyers to pay a smaller ADM vs going elsewhere and waiting.

I don't believe Ford's intention is to keep supply low, but they may be dealing with the reality that demand is so high scaling up may take a few years.

 

[F150ROD]

thats the optimist’s read of it, for sure. I’m more glass half empty.

I’m confused, though, as to exactly what about this is being described as “non-negotiable” pricing? If all it means is that the dealer posts a price that it doesn’t go up or down from, then is the customer left with only the option of finding an alternative dealer?

Because, to me, the MSRP (or a price just above or below it) being “non-negotiable” doesn’t address the areas where dealers continue to seek profits: F&I, dealer add-ons, 3rd party financing arbitrage, manufacturer-to-dealer holdbacks/incentives, and - perhaps most importantly - trade-in valuations.

Im probably thinking about this wrong, but for the average buyer for the average car, I’m not sure how transformative it is merely for dealers to be held to their advertised prices for vehicle being sold?

You won’t be doing any of that stuff, you’re doing everything online like the Tesla model unless you plan to buy off the showroom floor. If there even is an opportunity to buy off the showroom floor.

As far as trade-ins, as long as they don’t go the Tesla route with super low balling you.

 

[davehu]

It could also be a function of time.

" The choice is pay the ADM or decline your truck. "

I

no, the third choice is to change dealers.. buy it from someone else. competition is the only way to keep ADM's in check.

 

[adoublee]

I don't believe Ford's intention is to keep supply low, but they may be dealing with the reality that demand is so high scaling up may take a few years.

I do and it only makes sense to me to make most vehicles built to order instead of show up at a parking lot and pick from what they have. Covid set the precedence to make the move.

This move seems to move dealerships more toward being an extension of Ford Motor Company than an independent local business that manages vehicle stock and does service for profit. Leveraging this physical network of real estate and facilities could be a huge asset if done well.

 

[cvalue13]

You won’t be doing any of that stuff, you’re doing everything online like the Tesla model unless you plan to buy off the showroom floor. If there even is an opportunity to buy off the showroom floor.

i think that’s is precisely what this announcement is NOT saying

just as with today, everything priced online has a giant asterisk next to it saying “final pricing is determined by your dealer” - because that’s the law, and the law being referenced in the article as being immutable.

so best case scenario is, an online ordering portal you choose your dealer and the online truck pricing is the pricing selected beforehand by the dealer you’ve selected, but likely only for the truck itself.

setting aside the “non-negotiable” price of the truck itself, folks will still need to do what they should be doing today to avoid other dealer “gotchas” - bring in their own third party financing (or full cash) to the closing table, only sell to a third party any “trade in,” and refuse any and all dealer “add ons” that went agreed in the original order.

no, the third choice is to change dealers.. buy it from someone else. competition is the only way to keep ADM's in check.

At present, that appears to no longer be an option. It seems that once an order is made with a dealer, cord is not allowing or assisting to love dealers. That’s why there are a few threads here currently with dealers “springing” ADMs on them despite the order price being absent an ADM.

So, on one hand you’re right only if Ford makes it seem less and easy to switch dealers after an order, or instead make it impossible for dealers to add ADM post-order (which seems the paradigm being proposed).

I do and it only makes sense to me to make most vehicles built to order instead of show up at a parking lot and pick from what they have. Covid set the precedence to make the move.

personally, I agree

it’s not only Ford but every manufacturer that has realized they can increase sales prices, reduce or eliminate supply chain bullwhip, and so make significantly more net profit by selling significantly fewer units, all by simply restricting production such that demand always outstrips supply and no inventory sits.

 

[Gasdz]

Will charging at dealer be free? Available 24/7? At least having free coffee and a TV in the waiting room while charging can help pass the time on a trip (during business hours)

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