My dealership taking a break from selling Ford EVs

[AKgrampy]

Just a guess, but I would bet the manufacturer to dealer relationship is a bit better with Porsche.

With Ford it was more like- “we changed the MSRP to invoice price, you’re not going to make much selling BEVs, you also won’t make much servicing them, we will punish you if you mark the prices up, oh…… and if you want to keep selling these low margin vehicles, we will force you to spend hundreds of thousands to keep doing so.”

Now before anyone feels bad for the dealers (not that you would), they made crazy record profits the last few years selling ICEs.

So I don’t feel bad for them, but also don’t blame them for this business decision.

My thought has always been that at some sales level it would make sense for the dealer to install their own DCFC or partner with someone to have some installed nearby. At that point L2 will not cut it to service their sales and maintenance. Making the DCFC available to the public would help offset the costs. Just my 2 cents.

Sponsored

 

[Mach1E]

My thought has always been that at some sales level it would make sense for the dealer to install their own DCFC or partner with someone to have some installed nearby. At that point L2 will not cut it to service their sales and maintenance. Making the DCFC available to the public would help offset the costs. Just my 2 cents.

Agreed, but we aren’t even remotely close to that sales level.

Gross profit is maybe $2k per Mach E sold. Net profit (after paying the salespeople, overhead, etc) is probably negative.

Maybe they make some money in financing or trade ins. But it’s pretty slim.

After installing a DCFC, it would take years to make that money back. And the amount of cars they sell/service with a DCFC on the lot vs none? Negligible.

Ford just wants to expand the charging network and make the dealers foot the bill. But it’s not a winning business model.

There’s good reason car dealers don’t sell gasoline and boat dealers don’t sell bait. Stick to what you’re good at.

 

[dbsb3233]

Agreed, but we aren’t even remotely close to that sales level.

Gross profit is maybe $2k per Mach E sold. Net profit (after paying the salespeople, overhead, etc) is probably negative.

Maybe they make some money in financing or trade ins. But it’s pretty slim.

After installing a DCFC, it would take years to make that money back. And the amount of cars they sell/service with a DCFC on the lot vs none? Negligible.

Ford just wants to expand the charging network and make the dealers foot the bill. But it’s not a winning business model.

There’s good reason car dealers don’t sell gasoline and boat dealers don’t sell bait. Stick to what you’re good at.

And I still come back to dealerships simply being crappy locations for drivers to DCFC for the most part. Closed half the day, in some states on Sundays too, often chained off after-hours. No food, no shopping, almost none of the stuff that makes for a good DCFC station. Often not even near a highway travel route. Or even easy walking distance to restaurants or stores. In general, dealerships are one of the worst places I can think of.

The only reason it's even in the conversation for many drivers is because there's a Ford sign on the building just like the logo on their cars. And they think for some reason that a car dealership owes them refueling services.

If Ford really wanted to build a charging network, they should partner with a chain of travel plazas or something that make FAR better locations. But actually they went one better (much better)... partnering with the best DCFC network in the world to use their chargers starting next Spring. That makes 1000% more sense than the dealership plan.

 

[AKgrampy]

Agreed, but we aren’t even remotely close to that sales level.

Gross profit is maybe $2k per Mach E sold. Net profit (after paying the salespeople, overhead, etc) is probably negative.

Maybe they make some money in financing or trade ins. But it’s pretty slim.

After installing a DCFC, it would take years to make that money back. And the amount of cars they sell/service with a DCFC on the lot vs none? Negligible.

Ford just wants to expand the charging network and make the dealers foot the bill. But it’s not a winning business model.

There’s good reason car dealers don’t sell gasoline and boat dealers don’t sell bait. Stick to what you’re good at.

I agree but if you look at the deal Ford set up with the dealers there is a fairly good kickback from Ford. It looked like if you were a volume dealer it may make sense but like our local dealer who has sold maybe 2 EV’S this year and around a dozen total - not so much.

 

[Guss-E 2021]

Dealerships are going to do what they do I guess. Many are essentially old school small business enterprises. What Ford is asking is akin to asking a small mom and pop country market to adopt self check out and mobile payments. I'm embellishing here but I think you get my meaning.

The thing is, I can't ignore the fact that Ford is well into the process of building a ~9 million square foot, multi billion dollar battery and BEV facility right now. The biggest factory it has ever built. I think that is rather telling about Ford's vision of the future of its business.

Sure today, right this very second, most people are still buying ICEVs. So there is little risk of snubbing Model E. But we've all seen the global data. BEV registrations constantly rising regardless of other economic factors and trends. The number one selling model in the world is $40K+ electric car from a company with no ICEV legacy or dealerships. You can only hope any Model E hold-out dealer gets its transition timing right.

 

[DadzBoyz]

I can't figure out how to DM but just look at my location, it should be easy to figure out.

Could you “Walk..” er.. run there from Largo?

 

[dbsb3233]

The thing is, I can't ignore the fact that Ford is well into the process of building a ~9 million square foot, multi billion dollar battery and BEV facility right now. The biggest factory it has ever built. I think that is rather telling about Ford's vision of the future of its business.

While true, also remember that Ford has over 60 plants around the world. 32 of those in North America. So yes, they (like most auto manufacturers) are putting serious effort into adding in EVs to the mix. But there's also a long way to go, that will take a long time to gradually ramp up. Probably another decade to even get to the 50-50 mark vs ICE/hybrid output, I would guess.

 

[Guss-E 2021]

While true, also remember that Ford has over 60 plants around the world. 32 of those in North America. So yes, they (like most auto manufacturers) are putting serious effort into adding in EVs to the mix. But there's also a long way to go, that will take a long time to gradually ramp up. Probably another decade to even get to the 50-50 mark vs ICE/hybrid output, I would guess.

Wow do they really have 32 US plants? Actually, given historical F-150 sales, that shouldn't surprise me. These companies are so GD big. I can't imagine trying to steer that ship.

 

[dbsb3233]

Wow do they really have 32 US plants? Actually, given historical F-150 sales, that shouldn't surprise me. These companies are so GD big. I can't imagine trying to steer that ship.

They're not all plants that actually make the vehicles. Some are plants to make parts, like the engines, frames, and body panels. But that's along the same lines as the new battery plants coming.

https://en.wikipedia.org/wiki/List_of_Ford_factories

 

[RickMachE]

And I still come back to dealerships simply being crappy locations for drivers to DCFC for the most part. Closed half the day, in some states on Sundays too, often chained off after-hours. No food, no shopping, almost none of the stuff that makes for a good DCFC station. Often not even near a highway travel route. Or even easy walking distance to restaurants or stores. In general, dealerships are one of the worst places I can think of.

The only reason it's even in the conversation for many drivers is because there's a Ford sign on the building just like the logo on their cars. And they think for some reason that a car dealership owes them refueling services.

If Ford really wanted to build a charging network, they should partner with a chain of travel plazas or something that make FAR better locations. But actually they went one better (much better)... partnering with the best DCFC network in the world to use their chargers starting next Spring. That makes 1000% more sense than the dealership plan.

There are over 3,000 Ford dealerships in the US, and over 1,900 are going with Model e. Many are near a highway, often in non-city environments, making them a great location for DC fast charging. I can think of many places I've been where when you get off a rural highway, there's a Ford dealership. One dealership here is putting in the DC fast chargers at the far end of his parking lot, with a separate entrance, and going to block it off from the main lot, so no traffic is driving through his lot unless he's open.

 

[Reign of Ravens]

Seems like Ford should drop that requirement for dealership DCFC (customer-side) now that they made the deal with Tesla for use of the SC network. It never really made sense to begin with IMO, but now it really doesn't.

I agree and I never understood the DCFC at dealers.

As others have said, it was an effort to create a selling point against Tesla. Reading opinions online, one of the big selling points for Tesla is the Supercharger network. How could Ford fairly quickly and easily create a large charging network in many parts of the country? Purchasing land or partnering with other businesses is a potentially expensive, messy, and slow proposition. They already have a physical footprint that Tesla did not, so why not put it to use and get chargers at dealer locations?

I don't disagree that it's not the most appealing location for a charger at this point in time... but who knows what the long-term plan is? Most of us are thinking one or two steps ahead. Maybe Ford is thinking ten steps ahead and envisions a future in which the dealerships are completely transformed into a hub for other things, in which other businesses will want to add on to them, and driving traffic that will spend 15-40 minutes charging there is the first step.

The big question is how the shift to NACS will affect things. And who knows? Maybe the resistance from dealers, even those who signed on, was higher than expected and partly led to the change.

IDK, not sure I believe that...the dealership probably hasn't yet invested in required equipment to service EVs. Besides, who would turn down service on these vehicles? Ford pays the dealership to service these cars.

I have a friend married to an EV-licensed Ford technician. They hate working on these cars. There are two reasons: 1) they're not a joy to work on (slow process, difficult), and 2) because they're so new, almost all jobs on these cars are work done under warranty. Warranty work does not pay as well as other jobs.

Two of the three Ford dealerships near me seem to only have a single EV-certified technician. I assumed that part of it was training cost, but I'd also guess that the service technicians are also not jumping at the opportunity to become certified to work on EVs. If anything, it seems like a loss for them.

ICE vehicles have become less reliable which creates HUGE warranty costs for manufacturers which means less profit. I think this fact may be the biggest reason manufacturers are beginning to push EV’s.

I was curious about this line... what do you mean that ICE vehicles have become less reliable? Did you mean that they're less reliable by comparison to EVs? I would think that reliability should be increasing with time, although the complexity of all of the other stuff in our cars (sensors, cameras, etc) makes repair costs higher.

 

[Mach1E]

As others have said, it was an effort to create a selling point against Tesla. Reading opinions online, one of the big selling points for Tesla is the Supercharger network. How could Ford fairly quickly and easily create a large charging network in many parts of the country? Purchasing land or partnering with other businesses is a potentially expensive, messy, and slow proposition. They already have a physical footprint that Tesla did not, so why not put it to use and get chargers at dealer locations?

Except that now we will be able to use the Tesla network……. What’s the point of expanding it that much? Seems like an epic waste of money that will be passed on to the consumer.

 

[dbsb3233]

There are over 3,000 Ford dealerships in the US, and over 1,900 are going with Model e. Many are near a highway, often in non-city environments, making them a great location for DC fast charging. I can think of many places I've been where when you get off a rural highway, there's a Ford dealership. One dealership here is putting in the DC fast chargers at the far end of his parking lot, with a separate entrance, and going to block it off from the main lot, so no traffic is driving through his lot unless he's open.

Yes, *some* dealership locations happen to be decent for it, not because it's a dealership, but because there's no other DCFC in the area (classic "any port in a storm"). But most aren't. That's why I think it's a bad idea to mandate all EV dealers install it.

 

[dbsb3233]

I was curious about this line... what do you mean that ICE vehicles have become less reliable? Did you mean that they're less reliable by comparison to EVs? I would think that reliability should be increasing with time, although the complexity of all of the other stuff in our cars (sensors, cameras, etc) makes repair costs higher.

Yeah as far as I've heard, cars are being built better with each passing decade, and lasting longer. Not the other way around.

Granted, that is harder to judge off personal experience, because the older I got the more money I could afford to spend on better cars. Mine have definitely lasted longer than they did 5-6 decades ago, but could be more because I stopped buying econocars and started moving up the food chain.

 

[Ford Senior Master]

I was curious about this line... what do you mean that ICE vehicles have become less reliable? Did you mean that they're less reliable by comparison to EVs? I would think that reliability should be increasing with time, although the complexity of all of the other stuff in our cars (sensors, cameras, etc) makes repair costs higher.

Yes, ICE vehicles are becoming less reliable, in 27 years as both a technician and manager I have never seen the amount of warranty claims per vehicle we are seeing now and it’s not just Ford. Most all manufacturers are having issues. Do you believe the waiting times to get into dealers for service is due to EV’s?
Five years ago we were selling the same numbers of cars as now but only had 9 techs. I now have 26 techs and are adding another 28 service bays which means another 10-12 techs. These changes have nothing to do with our EV program. It’s due to increase in demand based on ICE vehicles. We are stretched thin and do the best we can.
While there have been issues with limited numbers of batteries and the early HVBJB most of our complaints are related to some electronic feature that is glitchy or isn’t programmed to operate like WE think it should. Well guess what… ICE customers have those same complaints. The only difference is they have to worry about all the power train issues we don’t have as well.

Sponsored