This and other articles point to Ford CEO Jim Farley wanting to shift to online only sales for EV's with non-negotiable pricing.
I guess dealers will only sell ICE vehicles and demo EVs?
I guess dealers will only sell ICE vehicles and demo EVs?
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Ford dropping dealers for EVs
- Thread starter jboy210
- Start date
Tam
Well-Known Member
mangrove79
Member
Wow, are we looking at the beginning of the end of dealerships? Probably not, but the online model to me is so far superior to the dealership model, at least for new cars where the manufacturer will arrange delivery. Dealerships may still have their usefulness at a distributor of used cars.
The dealers have so much political power/campaign finance bribery power. It's hard to see how they will not pass laws to protect them even more. I wonder what the limits are. I just got a Rivian truck in Washington state, apparently only Tesla has a "dealer not needed exclusion" here. Rivian said it all comes down to you have to pay the day before you pickup, other than that it's "a temporary tag from Illinois", but they'll register me in Washington without me having to do anything or pay extra, apparently. Will this pay on day before dodge avoid stupid laws in other states? I hope so. It's more apparent every day that dealers serve no useful purpose. There was a related article yesterday that said Ford had calculated the dealer and sales overhead as $2,000 for each vehicle purchase.
If they would have had fixed pricing to start with I would have reserved a Lightning on the first day. I have no idea if Jim Farley can make this happen, but he is smart to recognize this is a problem for Ford.
SmartElectric
Active Member
Many dealers are not marking up Lightnings. There is an entire thread listing dealers selling at MSRP on the Lightning owners forum.
Personally, I put down a reservation because $100 was a great hedge on Cybertruck arriving late (which is has!).
I am certainly no expert on this, but this is exactly what Tesla does to sell cars in states that do not allow direct sales. There are still like 10-12 states that do not allow direct sales, so the way tesla gets around that is to sell you the car in freemont CA. then ship it to you.
Shipping you the car cant be blocked, but this way you didnt actually buy the car in your state, you bought it in (in teslas case CA, sounds like rivian's case = IL) so this skirts those laws. I am sure if more car manufacturers do that, this will come to a head, one way or the other.
Cars wont be cheaper for savvy shoppers (in general) in a direct sales model, but there is a lot less stress on those transactions in general. The manufacturer will likely make more money, the customer will likely pay roughly the same but would pay MSRP everywhere vs this model now for most dealers where your negotiating skills matter, and the only one who suffers is the independent dealers.
Unless Manufacturers are willing to take over all the dealers, though, the dealers are not going to "sit still and take it" cause dont want online sales. Too easy to shop around, and not be put "in the box".
The problem is that some dealers are taking advantage of the situation and adding markups. Right now, Ford can only cajole/threaten dealers to have them sell at retail.
Farley wants to make selling at retail permanent ASAP, so people don't have WTH moments when they try to finalize their order and are hit with an uplift. And each one of these disgruntle customers tells 10 people, who make the story worse ("and they wanted their 1st born...") and tell 10 other people ...
It is a typical case of some bad apples spoiling it for everyone.
BTW, I ordered the Lightning as a hedge of not getting my 2022 X.
TomT
Technical Maven
Manufacturers do have one big club they can hold over dealers heads: vehicle allocation. Lexus did this quite successfully with some of their cars. Sell the car at MSRP or we will cut your future allocations. It worked.
If you read Farley's latest comments, that is exactly what he is talking about doing. Except it is for all EVs sales regardless of customer type.
Maybe Farley should create the "Henry" brand. Some people may not get the connection to electricity though.
TarmacSurfer
Member
I don’t see there being much sympathy for conventional automobile dealerships - they’ve clearly outlived their usefulness and represent little or no “value add” to the customer, just lots of bloat and extra cost. IMO they’re on borrowed time. In a few years they likely won’t exist because they simply will be unable to compete with the direct sales model being used by Tesla. In states where they have protections (from paying off politicians in the past) there will be pressure to change those laws, or those states won’t be able to compete with those having direct sales. It’s much the same phenomenon seen with RE agents and travel agents (it’s already happened to a large extent). Customers know and are getting sick of being ripped off and word travels very fast and very far in this age of instant communications. People can and will go elsewhere if they do not perceive a value to them.
The fastest way to get the ball rolling on direct sales is for the consumers to speak with their wallets. Obviously, it will be a much longer road for ICE, but for EVs I think it can happen a lot quicker. Ford's EV service right now is total garbage compared to Tesla. The supposed dealership advantage is wishful thinking.
A direct sales model should help, but Farley's track record with the MMEs promises is abysmal. Talk is cheap.
A direct sales model should help, but Farley's track record with the MMEs promises is abysmal. Talk is cheap.
SmartElectric
Active Member
Ford dealers comeuppance will be coming due in 2024 when the re-up agreements and negotiations will take place.
It has been reported that Ford deliberately is creating a special division for only EV's, and within that the 2024 negotiations will set terms to dealers on the EV's (not ICE).
It has been reported that Ford deliberately is creating a special division for only EV's, and within that the 2024 negotiations will set terms to dealers on the EV's (not ICE).
People in the business call it "nailing it to the floor". In other words, it's not really for sale at all. The updated story even says it's a demo, not for sale.
Dealerships are awful from beginning to end. ...and you're right that they've outlived their usefulness. That's why there's a federal class action lawsuit against several of them.
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