Ford is putting pressure on its dealers to help guide it along its electric vehicle journey.
Key Details
- Ford Motor is aiming to become the most valuable car maker in the industry.
- The company is now pushing dealers to exercise the option to become “EV certified.”
- This certification is Ford’s next move to boost profits and compete with EV giant Tesla.
- It asks dealers to spend $1 million to be part of the certification program to be EV ready.
Why it’s news
Ford is attempting to compete with the company that has forever changed the EV game—Tesla.
The company is asking its nearly 3,000 car dealers to become “EV certified.” In order to become certified the dealers must complete one of two programs, the first includes a $500,000 investment and the second is a $1.2 million investment.
Dealers in the higher tier, which carries upfront costs of $900,000, will receive “elite” certification and be allocated more EVs, according to Ford executives.
Dealers have to make a decision by October 31 and have to make the investments before the end of the year.
Company CEO Jim Farley wants Ford’s retailers to cut selling and distribution costs by $2,000 per vehicle to be competitive with the direct-to-consumer model, according to CNBC.
“We’re betting on the dealers. We’re not going to go direct. But we need to specialize,” says Farley. “The main message I have for the dealers, which I’ve never said before, because I didn’t believe it was true, is that you could be the most valuable franchise in our industry.”
Farley also said that the company has been closely watching Tesla and how it works the past couple of years.
Other options
Ford isn’t requiring its dealers to become EV certified, it is allowing them to make a choice of choosing the EV route or opt out and continue to sell gas-powered cars only.
Under the new framework, Ford and Farley are asking franchised dealers to specialize in either EVs, commercial vehicles, or traditional internal combustion engines. Larger dealers can continue selling all product lines, but the CEO is asking smaller stores to specialize in what fits their markets, according to CNBC.
Backing up a bit
Ford recently set major goals on EV production. The company says it will have enough battery capacity to produce 600,000 EVs per year by 2023.
The car company announced that it has secured battery capacity and raw materials that will help it reach its targeted annual run rate of 600,000 electric vehicles by 2023 and more than 2 million a year by 2026. It also plans for more than half its global production to be EVs by 2030.
In order to keep working towards its EV goals, Ford announced that it will cut 3,000 employees, mostly in North America and India, as it restructures to catch up in the race to develop software-driven EVs.
Farley has previously said that he believed the company was employing too many people and not all of them were skilled in EV production.
