DETROIT — Ford Motor Co. is asking its dealers to implement some of the most significant changes to their business in decades as it works to modernize its retail strategy and beat back threats from Tesla and electric vehicle startups that have championed direct-to-consumer sales.
Ford this week revealed plans to split its business into separate divisions: Ford Blue for internal combustion vehicles and Ford Model e for EVs. While long-standing franchise agreements ensure the structure of its retail network must stay intact, Ford wants to craft a new set of operating standards for EV sales that would combine the most popular aspects of direct-sale startups with the expertise its dealers have developed over more than a century.
The automaker plans to create the blueprint in tandem with dealers and won’t finalize details until after they provide input over the next few months. But executives have outlined some of what they want to include: a commitment to carrying no inventory, selling at nonnegotiable prices and operating with scaled-down facilities.
“It’s going to be much more efficient, a lot more online,” CEO Jim Farley told Automotive News. “It’s going to be a really different model.”
Despite limited details, many dealers so far are cautiously optimistic about the plan, although some who spoke to Automotive News say they worry Ford may price out stores in smaller markets and create a divide between the haves and have-nots for its newest products.
The automaker says each of its roughly 3,100 U.S. dealers will have the opportunity to “opt-in” to sell EVs alongside gasoline-powered vehicles under the new standards, similar to how its commercial vehicle dealers must adhere to certain requirements. Those who cannot afford to or choose not to will continue to sell combustion vehicles. It’s unclear whether Ford will let dealers choose to sell only EVs.
“Our message to the dealers is we’re betting on you,” Farley said on a call announcing the news. “Get ready to specialize.”
Ford has not yet told dealers how much they would be asked to invest; executives told Automotive News that figure won’t be set until the rules are finalized.
Retailers who sell the Mustang Mach-E and E-Transit and are set to receive shipments of the F-150 Lightning starting this spring, but who don’t opt in to the new standards, will be allowed to continue to carry those EVs until the end of 2023, when the automaker’s current certification requirements expire. The new retail model will take effect in January 2024.
The Ford National Dealer Council is pleased the company is stressing cooperation, said council Chairman Tim Hovik.
“There’s a level of respect and trust that’s going to allow us to have those tough conversations as we move into the next world we’re going to move into,” Hovik said. “I really feel we have honest brokers involved in the conversation. I don’t think there’s hidden agendas.”
