Ford CEO Farley challenges dealers to cut EV cost to customers by $2,000

[Fixbear]

“Equal to the Mach E” in what ways?

Zero chance it’s gonna compete in terms of features, quality and performance at a $30k price point.

Looked at the stats….. the “fast one” is 0-60 in 6 seconds.

It’s an economy car. And that’s fine, people need more options.

I think it may be why Ford pulled everything out of the Select for 23. Still a big price spread. Time will tell.

 

[DBPNW]

No one has mentioned GM's announcement about Their new SUV starting at $30,000. Equinox is supposed to be equal to the MME with a starting range of 250 miles. Shipping has started. I noticed that they waited till Ford published the new price list for the push release.

shipping has started? You sure. I don't think so.

 

[Tugmariner]

https://www.autoblog.com/2022/09/09/ford-jim-farley-dealers-las-vegas-customer-ev-cost-cuts/

Ford's Farley will challenge dealers to cut EV cost to customers by $2,000
It needs to happen to stay competitive with Tesla, but some dealers may balk

September 9, 2022. DETROIT — Ford Motor Co Chief Executive Jim Farley will go to Las Vegas next week to roll the dice on a strategy to convince dealers to cut as much as $2,000 from the cost of delivering an electric vehicle to a customer.

Ford has told dealers that one key topic for the meetings will be a discussion of new agreements that would govern how dealers sell Ford's expanding lineup of electric vehicles.

Farley told analysts in July that Ford needs to cut $2,000 a vehicle out of selling and distribution costs to be competitive with Tesla Inc and other electric vehicle startups that sell directly to consumers without franchised dealers.

Full article:
https://www.autoblog.com/2022/09/09/ford-jim-farley-dealers-las-vegas-customer-ev-cost-cuts/

The dealer model needs to change regardless of whether they are selling ICE or EV. I’m finding the sale staff in the dealers in my area know next to nothing about the vehicles they “sell” and the things they tell me are frequently unreliable. If the salesman adds little or no value, then why pay her commission? If customers are ordering direct from the factory then 1) dealers dont need as many salesmen, and 2) they no longer need large lots to hold inventory. By cutting sales staff, and shrinking footprint, dealers can save $2k per vehicle - easily. Ford can assist by providing knowledgeable and competent online sales-staff that customers from anywhere can interact with anytime via Zoom. The dealers can then focus on providing test drives, a show room, new vehicle receiving and prep, servicing vehicles, and providing other usefull value-add services. The dealer’s used car business can remain as is. They can acheive $2k in cuts.

 

[dbsb3233]

The dealer model needs to change regardless of whether they are selling ICE or EV. I’m finding the sale staff in the dealers in my area know next to nothing about the vehicles they “sell” and the things they tell me are frequently unreliable. If the salesman adds little or no value, then why pay her commission? If customers are ordering direct from the factory then 1) dealers dont need as many salesmen, and 2) they no longer need large lots to hold inventory. By cutting sales staff, and shrinking footprint, dealers can save $2k per vehicle - easily. Ford can assist by providing knowledgeable and competent online sales-staff that customers from anywhere can interact with anytime via Zoom. The dealers can then focus on providing test drives, a show room, new vehicle receiving and prep, servicing vehicles, and providing other usefull value-add services. The dealer’s used car business can remain as is. They can acheive $2k in cuts.

The other thing that will probably add to reduction in number of dealerships is valuable real estate. Many of the dealerships have been taking up large chunks of real estate in cities that have filled in to the point where that land is quite valuable now.

 

[Mach1E]

shipping has started? You sure. I don't think so.

Just a guess, but I’m betting they need to finalize pricing and open up ordering before they start “shipping.”

 

[Reign of Ravens]

No one has mentioned GM's announcement about Their new SUV starting at $30,000. Equinox is supposed to be equal to the MME with a starting range of 250 miles. Shipping has started. I noticed that they waited till Ford published the new price list for the push release.

This is the first time I've seen a picture of it that wasn't just teaser-style images. It's really interesting... a lot of products these days tend to copy certain aspects of the class-leading product to beat. I thought Ford copied parts of Tesla, but I chucked when I saw the "mustache" at the front of this Equinox EV. Unless these companies are all hiring the same designer, that looks like they're copying the Mach-E styling at the front!

 

[new to mach-e]

Just a guess, but I’m betting they need to finalize pricing and open up ordering before they start “shipping.”

That image says "available fall 2023" so think more early 2024...

 

[dtbaker61]

waiting for the headline... Dealers challenge Ford to reduce costs by $2,000

I would suggest to Ford that if there were a true 'base model' with only the bare minimum amount of sensors/electronics/assist options required to meet safety requirements... it would reduce cost by thousands. The very basic safety features like a backup camera and blind-spot sensor I do think have high value.... but the 'convenience&comfort' stuff can all go as far as I'm concerned.

I would have jumped at a base model without a giant center screen, power seats, sensors/cameras, or any driver assist like lane keeping features if it resulted in a substantially lower cost.

I got the Select for just these reasons, without pano glass roof, blue cruise, or a rear liftgate.... but would have preferred even LESS electronics, sensors, etc if available.

AWD, 200+ mile range, reasonable performance, and local Service were my main criteria. I did not expect the MME to be a track car, or 'the fastest' thing on the street. As long as the primary criteria are met, my next most important was to keep the net cost below $45k.... and hoping for below $40k but that was not possible even at the 'base trim' AWD w SR battery.

 

[Rfehl62]

I've underwritten financing for a number of large New England Ford dealerships. I've seen first hand what you are talking about when analyzing the financials. You guys are saving a ton on floorplan costs. And though not great from a labor standpoint, staffing needs have been less as well further cutting costs.

Is that what you are seeing at your dealership as well?

Absolutely but floorplan has never been a big concern since Ford reimburses the dealer as long as the dealerships sells the vehicle in a certain number of days.

 

[Guss-E 2021]

Absolutely but floorplan has never been a big concern since Ford reimburses the dealer as long as the dealerships sells the vehicle in a certain number of days.

On the principle but not for the interest expenses and any other miscellaneous fees associated with extending and renewing the line no? Though what I've seen is "floorplan assistance" (how it's described on the dealer statement) has actually exceeded the interest and associated costs lately because units are moving so fast.

There is a 2022 Mach-E Premium on the lot at my dealership. Asking $69,140 for it. I'm sort of keeping an eye on how many weeks it sits there. Dealer is across from the grocery store so I don't go out of my way to check.

 

[Gitboxdre]

On the principle but not for the interest expenses and any other miscellaneous fees associated with extending and renewing the line no? Though what I've seen is "floorplan assistance" (how it's described on the dealer statement) has actually exceeded the interest and associated costs lately because units are moving so fast.

There is a 2022 Mach-E Premium on the lot at my dealership. Asking $69,140 for it. I'm sort of keeping an eye on how many weeks it sits there. Dealer is across from the grocery store so I don't go out of my way to check.

My dealer has a ‘22 Select in stock with 590 miles for $58,995 (window sticker is $48,905 MSRP and a ‘21 Premium with 22k miles (formerly a mannequin vehicle, only owned by the dealership) for $61,995 (original MSRP $56,040). Both have been available for a few weeks now.

Yet this same dealer adds no ADM to any new purchases.

 

[Guss-E 2021]

My dealer has a ‘22 Select in stock with 590 miles for $58,995 (window sticker is $48,905 MSRP and a ‘21 Premium with 22k miles (formerly a mannequin vehicle, only owned by the dealership) for $61,995 (original MSRP $56,040). Both have been available for a few weeks now.

Yet this same dealer adds no ADM to any new purchases.

I feel like the clock is ticking. I believe the Fed is going to raise rates once more. That will further affect auto financing. Between higher loan rates and ADM, the MME will start to become a more difficult sale. But then that's how the system works I guess.

 

[Mach1E]

My dealer has a ‘22 Select in stock with 590 miles for $58,995 (window sticker is $48,905 MSRP and a ‘21 Premium with 22k miles (formerly a mannequin vehicle, only owned by the dealership) for $61,995 (original MSRP $56,040). Both have been available for a few weeks now.

Yet this same dealer adds no ADM to any new purchases.

They probably have a high price because they don’t want them to sell.

If they sell them, they won’t have anything lure in new orders. It’s really harder to sell cars sight unseen. The “test drive” always seals the deal.

 

[Rfehl62]

On the principle but not for the interest expenses and any other miscellaneous fees associated with extending and renewing the line no? Though what I've seen is "floorplan assistance" (how it's described on the dealer statement) has actually exceeded the interest and associated costs lately because units are moving so fast.

There is a 2022 Mach-E Premium on the lot at my dealership. Asking $69,140 for it. I'm sort of keeping an eye on how many weeks it sits there. Dealer is across from the grocery store so I don't go out of my way to check.

You are correct regarding the floorplan assistance. I will also note that Ford plans to cut the program entirely in the next year or so.