1,920 Ford dealers have enrolled in Model e program for 2024-2026 period

[Mach1E]

How much does the avg dealership make per year?

Depends on how many cars they sell.

But gross profit per new car is less than $2,000. Net profit of course is much less:

https://www.onlineautodealered.com/career-central/how-much-do-car-dealers-make

25 cars per year with $2k gross profit =

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[21st Century Pony]

Depends on how many cars they sell.

But gross profit per new car is less than $2,000. Net profit of course is much less:

https://www.onlineautodealered.com/career-central/how-much-do-car-dealers-make

25 cars per year with $2k gross profit =

I have read that up to now a lot of dealership profit has been from after-sale services etc.. no source for this data off the top of my head.

 

[devmach-e]

As I said, it was my buddy's company, he didn't go through much details, but he said new taxes and fees being imposed and they are fed up with it to the point where few distributors were debating if they should boycott and teach the state a lesson, I am not sure if it's crude or gasoline, but he said if a boycott is to happen, then gas prices here will see double digits, that was a month ago, hopefully it is resolved or will be.

There is a proposal for a windfall tax on oil companies, but nothing has been passed as of yet. There was hearing last month about it, and none of the major oil companies bothered to show up. I'm wondering if that is what your buddy is referring to.

California did revamp their gas taxes and associated fees about 5 years ago via SB1. They tried to repeal it in 2018 via Prop 6, and it failed spectacularly, losing by over 1.65M votes.

 

[dbsb3233]

I have read that up to now a lot of dealership profit has been from after-sale services etc.. no source for this data off the top of my head.

4 main areas:
1. New car sales
2. Used car sales/trade-ins
3. Parts and service
4. Financing

There's also potential for bonuses/incentives from the manufacturer.

 

[Mach1E]

I have read that up to now a lot of dealership profit has been from after-sale services etc.. no source for this data off the top of my head.

That’s true traditionally.

But the service departments are gonna go broke servicing BEVs.

 

[21st Century Pony]

That’s true traditionally.

But the service departments are gonna go broke servicing BEVs.

Yup... that's why I wrote the operative verb in the past tense.

 

[dbsb3233]

That’s true traditionally.

But the service departments are gonna go broke servicing BEVs.

Fortunately for them that's a decade+ away. 95% of vehicles sold today are still ICE that will be on the roads well into the 2030's.

Plus the predictions of BEVs being mostly problem-free might be a bit premature. My Mach-E has already spent more days in the shop than my 2013 Escape I've had for a decade.

 

[ThatGuyLando]

That’s true traditionally.

But the service departments are gonna go broke servicing BEVs.

I got an (assuming automated) email from my dealer regarding my Mach-e. Looks like it's due for its 3-month oil change. If I had more free time I'd bring it in just for shits and giggles.

 

[Mach1E]

Fortunately for them that's a decade+ away. 95% of vehicles sold today are still ICE that will be on the roads well into the 2030's.

Plus the predictions of BEVs being mostly problem-free might be a bit premature. My Mach-E has already spent more days in the shop than my 2013 Escape I've had for a decade.

Yup, but to the point at hand….

Paying $500k to 1.2 million to have the right to sell and service BEVs……. Doesn’t seem like you’re missing out on a lot of $$.

Most of the “in the shop” repairs seem to be plugging it in to a computer. Most of that would could be done OTA in the near future.

Actually I’m kinda shocked they can’t specific updates OTA now.

 

[dbsb3233]

Yup, but to the point at hand….

Paying $500k to 1.2 million to have the right to sell and service BEVs……. Doesn’t seem like you’re missing out on a lot of $$.

Most of the “in the shop” repairs seem to be plugging it in to a computer. Most of that would could be done OTA in the near future.

Actually I’m kinda shocked they can’t specific updates OTA now.

The "sell" part depends on how generous the commissions are on the fixed-price sales, I suppose. And the expected volume. But yeah, that math looks tough. Even if Ford gives them a generous $2000 sales commission per vehicle (which would likely jack up MSRP's some), that's 600 EV sales to break even, and probably 1000 to make a reasonable profit on the deal. And the commission probably isn't really that high.

And yeah at least in theory, maintenance should be less frequent than ICE. And parts sales almost non-existent (few people are gonna do their own EV repairs).

 

[Reign of Ravens]

Yup, but to the point at hand….

Paying $500k to 1.2 million to have the right to sell and service BEVs……. Doesn’t seem like you’re missing out on a lot of $$.

There's more data that we need to know about this. For example, EVs right now are generally priced in the premium to luxury category of vehicles. People buying into them are presumably trading in vehicles of a similar class. They might even be trading in other EVs, which are all the rage and rare right now. If dealerships are generally making more money on second-hand sales than on new sales, selling EVs might be a magnet for attracting better second-hand vehicles to sell. I'm just not sure how often people are swapping for EVs - as one data point, I had my Leaf for two years, but life circumstances (needing a larger vehicle) caused me to trade it in earlier than I normally would have. Reading some Tesla forums, it almost seems like a lot of people are trading vehicles in every 3-5 years, which is sooner than I would have expected.

Then there's the fact that the tide is coming in on EVs, and I think everyone accepts that now. In my area, EVs are ridiculously popular. Even if a new sale doesn't net a ton of money, it's a sale and puts the dealership on the map. Maybe people will continue to trade up in the future, or maybe some people are interested in EVs but not entirely committed and they'll buy something else... it's a possibility that wouldn't happen if they just go to the Kia dealership to look at an EV6, right?

The timing is the tricky part for the dealership. I think we're getting close in many parts of the country now, but I don't think we've yet reached the tipping point where people are dead-set on EVs over ICE vehicles. I'd expect the cost of the charging infrastructure to go down with time, but right now it's still quite expensive. Even though as a consumer I'd want more dealerships to buy in as soon as possible, from a business standpoint it probably makes more sense to wait the two or so years until Ford reopens enrollment for the program, to see how much greater the demand for EVs is, and to hope that the costs to meet Ford's requirements would have gone down.

 

[Mach1E]

There's more data that we need to know about this. For example, EVs right now are generally priced in the premium to luxury category of vehicles. People buying into them are presumably trading in vehicles of a similar class. They might even be trading in other EVs, which are all the rage and rare right now. If dealerships are generally making more money on second-hand sales than on new sales, selling EVs might be a magnet for attracting better second-hand vehicles to sell. I'm just not sure how often people are swapping for EVs - as one data point, I had my Leaf for two years, but life circumstances (needing a larger vehicle) caused me to trade it in earlier than I normally would have. Reading some Tesla forums, it almost seems like a lot of people are trading vehicles in every 3-5 years, which is sooner than I would have expected.

Then there's the fact that the tide is coming in on EVs, and I think everyone accepts that now. In my area, EVs are ridiculously popular. Even if a new sale doesn't net a ton of money, it's a sale and puts the dealership on the map. Maybe people will continue to trade up in the future, or maybe some people are interested in EVs but not entirely committed and they'll buy something else... it's a possibility that wouldn't happen if they just go to the Kia dealership to look at an EV6, right?

The timing is the tricky part for the dealership. I think we're getting close in many parts of the country now, but I don't think we've yet reached the tipping point where people are dead-set on EVs over ICE vehicles. I'd expect the cost of the charging infrastructure to go down with time, but right now it's still quite expensive. Even though as a consumer I'd want more dealerships to buy in as soon as possible, from a business standpoint it probably makes more sense to wait the two or so years until Ford reopens enrollment for the program, to see how much greater the demand for EVs is, and to hope that the costs to meet Ford's requirements would have gone down.

While everything you said is possibly true, there are so many maybes and unknowns in there.

It’s a gamble for the dealerships either way.

Doesn’t matter how popular EVs get if you’re limited to 25 sales per year.

To keep things in perspective, the Mach E is still the 2nd worst selling vehicle in Ford’s lineup. And volume hasn’t grown much in the 2 years it’s been selling.

 

[Maquis]

While everything you said is possibly true, there are so many maybes and unknowns in there.

It’s a gamble for the dealerships either way.

Doesn’t matter how popular EVs get if you’re limited to 25 sales per year.

To keep things in perspective, the Mach E is still the 2nd worst selling vehicle in Ford’s lineup. And volume hasn’t grown much in the 2 years it’s been selling.

Good points.

Every business investment is a gamble. This one is probably higher on the risk scale than most.

The sales of Mach-Es is not due to lack of demand. If Ford could build to meet demand, the Mach-E could easily be in Ford’s top selling vehicles. I know that doesn’t help a dealer that needs volume to survive, but it won’t always be this way.

 

[bbhaag]

While everything you said is possibly true, there are so many maybes and unknowns in there.

It’s a gamble for the dealerships either way.

Doesn’t matter how popular EVs get if you’re limited to 25 sales per year.

To keep things in perspective, the Mach E is still the 2nd worst selling vehicle in Ford’s lineup. And volume hasn’t grown much in the 2 years it’s been selling.

Perspective is a funny thing though. It can change when new information is given.

While it's true that the Mach-E is Fords second worst selling vehicle from a different perspective one could say that Ford is the worlds second largest EV manufacturer second only to Tesla.

That is an impressive accomplishment especially when you consider Tesla had a 10+ year head start.

 

[sotek2345]

The "sell" part depends on how generous the commissions are on the fixed-price sales, I suppose. And the expected volume. But yeah, that math looks tough. Even if Ford gives them a generous $2000 sales commission per vehicle (which would likely jack up MSRP's some), that's 600 EV sales to break even, and probably 1000 to make a reasonable profit on the deal. And the commission probably isn't really that high.

And yeah at least in theory, maintenance should be less frequent than ICE. And parts sales almost non-existent (few people are gonna do their own EV repairs).

For the Lightning, Ford is giving dealers 10% if they follow all of the rules, so that is $5k to almost $10k per truck.

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