Some Dealers Dropping Out of EV Program

[heisnuts]

It looks like the total numbers of Ford dealers who are still opted into the program is down to about 1,550.

Ford To Set Up 'Retail Replenishment Centers' For Its EV Dealers (msn.com)

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[DevSecOps]

There's all kinds of takes on this... none of which are good:

Ford dealers give Tesla and other EV makers an early holiday gift

The below article gives some interesting insight into what's required. It's crazy expensive for a dealer to be "elite".

Ford loses nearly 400 participants from its EV dealer program

"For around $1 million, dealers can opt for the higher “Elite” tier, which includes an additional fast charger, demo units, rapid replenishment, and a presence on Ford.com."

Ford really has to be smoking some crazy shit to think that these dealers want to pay $500K or $1M to be EV certified and then keep a boat load of non-selling EV inventory on their lots. It's a lose-lose for them right now and not at all surprising that they are jumping ship.

 

[Avelli]

Ford really has to be smoking some crazy shit to think that these dealers want to pay $500K or $1M to be EV certified and then keep a boat load of non-selling EV inventory on their lots. It's a lose-lose for them right now and not at all surprising that they are jumping ship.

Especially since the margins on BEVs are reportedly low, with very little money made from parts or service.

It makes you wonder if Ford is playing the long game, trying to get dealers to get out of their way so Ford can claim dealers aren't supportive, and thus facilitate Ford towards a direct-to-consumer sales model.

 

[azerik]

Especially since the margins on BEVs are reportedly low, with very little money made from parts or service.

It makes you wonder if Ford is playing the long game, trying to get dealers to get out of their way so Ford can claim dealers aren't supportive, and thus facilitate Ford towards a direct-to-consumer sales model.

That's why they keep tacking ADM and stupid stuff on to them. What dealers don't realize is all they need to do is sell the ESP. Then they have a tap to continue to charge Ford back for updating modules and failing. Maybe once Ford gets charged for enough of this stupid work they'll put something in place and fix it for a change.

I'm sure it's pretty hard for them to try to remove Dealers from the mix. There's probably paperwork a mile long that was written 100 years ago that's keeping both the dealers and FMC uncomfortable.

 

[Mach-Lee]

Another major factor that hurt Ford here was not reallocating canceled orders to different customers. Instead, the dealer would still receive the vehicle, which is why all the cancelled Mach-Es are now piling up at dealers.

When you cancel your order, your production slot should immediately be reallocated to the next person in line. This would also cut down on wait time.

They need to be more like Tesla and get the wait time down to only a couple months. Inventory backlog costs money.

 

[DevSecOps]

When you cancel your order, your production slot should immediately be reallocated to the next person in line. This would also cut down on wait time.

They need to be more like Tesla and get the wait time down to only a couple months. Inventory backlog costs money.

They can't because even with a custom order the vehicle is allocated to the dealership and not allocated to the customer. That's also the reason that so many dealerships would take vehicles and sell them with ADM to someone else from under the nose of the person who ordered it. The dealership owns the car and they did what they wanted to do with it at the expense of the Ford name and reputation.

As I know you are aware, Tesla owns all of their service centers and vehicles so therefore they can match a vehicle to an order and transport it there.

As part of the Tesla order process they assign you an Order Number. That order number is for a vehicle that they don't produce specifically for that individual. Instead the factory does batches of cars for the masses, not for custom orders. As those cars roll off the line, that match the order you placed, the VIN is then assigned to you and the vehicle is shipped to your location. Additionally, you have the ability to "match" inventory, many times at a discount, in order to clear up inventory that wasn't matched. All of this is done in the app and you retain the same order number throughout.

So, I'm fairly certain it's impossible for Ford to reallocate inventory like Tesla does so long as they have a dealer network.

 

[RedStallion]

Especially since the margins on BEVs are reportedly low, with very little money made from parts or service.

It makes you wonder if Ford is playing the long game, trying to get dealers to get out of their way so Ford can claim dealers aren't supportive, and thus facilitate Ford towards a direct-to-consumer sales model.

I don't think Ford would want to run their own dealerships. It's a low profit margin business, and it brings nothing but negative popularity. Unloading all those problems on third party is really advantageous even though Ford would have to give them some 10% discounts for their troubles.
Btw, I don't think Tesla is happy having to run their dealerships either. But they have no choice.

 

[thekat03]

I don't think Ford would want to run their own dealerships. It's a low profit margin business, and it brings nothing but negative popularity. Unloading all those problems on third party is really advantageous even though Ford would have to give them some 10% discounts for their troubles.
Btw, I don't think Tesla is happy having to run their dealerships either. But they have no choice.

Running a car dealership is a low profit margin business?
https://slate.com/news-and-politics/2023/05/rich-republicans-party-car-dealers-2024-desantis.html

 

[Mach-Lee]

So, I'm fairly certain it's impossible for Ford to reallocate inventory like Tesla does so long as they have a dealer network.

That's how it's been, but I see the new Retail Replenishment Centers as a potential step towards changing the status quo. Perhaps now a cancelled custom order can be returned to the replenishment center so another dealer can utilize it. Dealers already do transfers and swaps with other dealers, having the replenishment center can make transfers and returns more painless and routine. "Just send it back" is easier than "I have to find another dealer willing to trade". I assume sending it back would clear their floor plan debt for the vehicle so they can order something else. Having a supply available on shorter notice will also help prevent "hoarding" of vehicles.

It does dealers no good to have a bunch of cars sitting on their lot that aren't selling. If they can offload that and the debt associated with it, they will go along with it as long as they can get what they need.

If Ford Store Morgan Hill could return 150 of the 221 Mach-E's they have sitting around, I think they would be ecstatic.

 

[DevSecOps]

That's how it's been, but I see the new Retail Replenishment Centers as a potential step towards changing the status quo. Perhaps now a cancelled custom order can be returned to the replenishment center so another dealer can utilize it. Dealers already do transfers and swaps with other dealers, having the replenishment center can make transfers and returns more painless and routine. "Just send it back" is easier than "I have to find another dealer willing to trade". I assume sending it back would clear their floor plan debt for the vehicle so they can order something else. Having a supply available on shorter notice will also help prevent "hoarding" of vehicles.

It does dealers no good to have a bunch of cars sitting on their lot that aren't selling. If they can offload that and the debt associated with it, they will go along with it as long as they can get what they need.

If Ford Store Morgan Hill could return 150 of the 221 Mach-E's they have sitting around, I think they would be ecstatic.

I don't think much is completely understood about these replenishment centers but from what I've seen it's just going to be EV holding so that they don't have to keep inventory on lots. It'll allow them to purchase vehicles from a pool.

So the dealer network doesn't change they just don't have to wait for a factory build if there's allotment in the replenishment center. I haven't seen anything giving them the ability to trade or sell back/return vehicles.

They need to get rid of the dealership model completely. All they are really doing is making it easier for dealerships and continuing down the same path.

 

[RedStallion]

Running a car dealership is a low profit margin business?
https://slate.com/news-and-politics/2023/05/rich-republicans-party-car-dealers-2024-desantis.html

Informational sewage.

 

[RedStallion]

Perhaps now a cancelled custom order can be returned to the replenishment center so another dealer can utilize it.

Dealers never had any problems selling cars to the other dealerships. When a car is in demand a dealer may get one for you from another dealer even far away. The problem is that the EVs are not selling now anywhere, so every dealer who ordered them have large inventories sitting on the lots.
Just recently 3900 auto dealers wrote a letter to the White House, stating:

"The reality, however, is that electric vehicle demand today is not keeping up with the large influx of BEVs arriving at our dealerships prompted by the current regulations. BEVs are stacking up on our lots"

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