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Ford walks back EV dealer restrictions to boost sales
Jun 13, 2024 2:18 PM

DETROIT, June 13 (Reuters) - Ford Motor Co ( F ) will

soon allow all of its dealers to sell electric vehicles,

reversing its more selective allocation system in an effort to

boost slower-than-expected sales.

The pivot, which goes into effect July 1, unravels previous

requirements that only let dealers sell EVs like the F-150

Lightning pickup and Mustang Mach-E SUV if they had invested a

set amount in training and infrastructure.

The Dearborn, Michigan, automaker unveiled the EV selling

rules in late 2022, requiring dealers to spend between $500,000

to about $1 million on expensive charging equipment and other

programs. About half of Ford's 2,800 dealers enrolled in the

group since it was introduced.

"We want to make these great vehicles more accessible to

everyone," Marin Gjaja, chief operating officer for the

company's EV business, said of the change in requirements.

"There is always a learning curve with a new technology and

introducing EVs in a simple, hassle-free way helps to remove

many of the perceived barriers our dealers and customers are

concerned about," he added.

Dealers were required to meet certain training requirements,

in addition to installing chargers, to prepare their staff to

help educate customers on the complexities of EV ownership.

Ford CEO Jim Farley previously warned dealers they would be

held to "brutal" standards to stay competitive and serve

customers during the EV transition.

That transition has been bumpier than many auto executives

expected. Automakers like Ford have prioritized production of

hybrid vehicles as sales growth rate of these models have

outpaced pure EVs. U.S. hybrid sales increased 25.3% from 2022

to 2023 for Ford, whereas EV sales rose 17.9% over the same

period.

New EV players like Tesla sell directly to consumers

without dealerships, giving it a financial advantage over legacy

automakers. Farley has noted that Ford spends about $2,000 per

vehicle more than Tesla because of its franchise dealer model.

Dealers who did invest hundreds of thousands into the

machinery and programs Ford required are feeling burned now that

EVs will soon be available to all. Some dealers told Reuters

they are having trouble moving EVs off their lots into the hands

of customers, and are even refusing shipments of electric models

because they are selling them at a loss.

Scott Kunes, COO of a Midwest dealer group that sells Ford

vehicles among several other brands, was one of the 1,400

dealers who joined the program. He had concerns about EV demand,

though, so his group only made the investment for their two

largest Ford locations in Wisconsin and Illinois.

"The dealers have been kind of screaming from the sidelines

for a while here that the EV demand is just not there," Kunes

said. While he's glad Ford took the step they did, "it's still a

little bit too late."

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