Ford Motor Co. is racing against other auto retailers to establish a lead position in the electric vehicle (EV) market by getting the dealers ready for business.
- Ford’s approach to the EV race differs somewhat from its competitors. The company has divided into two main branches—Ford Model e and Ford Blue.
- The EV-focused branch, Ford Model e, has three automobiles for sale—the F-150 Lightning pickup truck, Mustang Mach-E crossover/SUV, and the e-Transit van.
- The company encouraged major buy-in of around $1 million from Ford dealers around the country to build this out.
- Ford Blue continues to produce the traditional gasoline cars for which the company is known.
- By 2023, Ford hopes to produce 600,000 EVs per year and reach 2 million per year by 2026.
Why it’s news
Ford’s strategy goes beyond production of EVs. It extends to converting dealerships in order to prepare them to sell the EVs.
In September, Ford asked its dealerships to become EV-certified and invest between $500,000 and $1.2 million in upgrades to their dealerships. The greater the investment dealerships chose, the more EVs they were promised. Dealers who chose to invest the $1.2 million were also eligible to receive elite EV certification.
Almost 90% of this investment will be used to install charging infrastructure. The remaining 10% will be dedicated to training, delivery, and pickup options for customers, and general digital upgrades.
By the October 31 deadline, nearly two-thirds of Ford dealerships had agreed to the investment deal. Of those who agreed to participate, 84% chose higher levels of investment.
Dealers who opted out of the deal will have another chance in 2027. For now, those dealers will continue selling gasoline cars.
By January 2024, the first round of Model e dealer-exclusive vehicles will hit the market.
The 119-year-old company has taken a very different approach from its competitor General Motors. GM has forced its dealerships to begin offering EVs and offered buyouts to dealers who didn’t want to participate.
However, Ford still has to compete with direct-to-consumer methods at companies like Tesla. Ford executives have directed dealerships to cut their selling and distribution costs by at least $2,000.
Backing up a bit
GM and Ford race to be the leaders in the next generation of automobiles—and the two companies have taken different approaches to their next steps.
While looking to the future, General Motors (GM) has chosen to diversify its investment in electric (EVs) and self-driving vehicles.
Ford Motor, on the other hand, has turned away from any focus on autonomous vehicles and focused entirely on EVs and already-developed technologies.
The automakers have long been in competition with one another, but the race for the best EVs has added another level to the competition.
GM initially invested in EVs and autonomous vehicles first, giving it a head start. Its recent third-quarter results were significantly better than Ford’s.