During its annual dealership meeting in Las Vegas, Ford told its nearly 3,000 United States dealers that they will need to invest up to $1.2 million in upgrades to continue selling EVs under the automaker's Ford Model E business unit.
Dealers have until October 31 to get on board if they want to be part of the first round of Model E stores, InsideEVs reported. Dealers can also sign on at specified later dates, or opt out of becoming Model E dealerships, according to the report.
Model E is the EV passenger-car and software division created when Ford split itself into three business units earlier this year. Along with Model E, Ford Pro handles commercial vehicles, while Ford Blue Oval handles internal-combustion passenger vehicles, hybrids, and plug-in hybrids.
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Ford is creating two tiers of Model E dealerships—Certified and Certified Elite. Lower-tier Model E Certified dealerships will have to install at least one DC fast charger, which will also have to be available for public use. Ford estimates the cost to become Model E Certified will average $500,000.
As Ford outlined, Model E Certified Elite dealerships will need to, at minimum, install two high-power DC fast chargers and one Level 2 AC charger for customers, as well as one DC fast charger for public use. It estimates the all-in cost for Elite status to be $1 million to $1.2 million, and expects charging infrastructure to account for 90% of the upgrade cost for both tiers.
While Ford will stick with franchised dealerships instead of a Tesla-like direct sales model, dealers that opt into the Model E business will also have to agree to non-negotiable pricing.
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Dealers can also opt out of becoming Model E certified, meaning they won't be able to sell electric passenger cars in the future. Those that opt out by October 31 will have discontinue electric car sales effective January 1, 2024. Dealers will have another opportunity to become Model E certified, but then won't be able to sell electric cars until January 2027.
It also appears Ford won't offer buyouts to dealers, as General Motors is doing for Cadillac and Buick dealers that opt out of those brands' EV shifts. In an interview with CNBC, Ford Model E chief customer officer Marin Gjaja said the Blue Oval's plan gives dealers more choices.
"We don't think it's fair to force them to go on the EV journey or force them into a buyout," Gjaja said.
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Dealers can also stick with the Blue Oval and Pro business units and continue selling other vehicles, Ford spokesperson Said Deep told Motor Authority, noting that the automaker is still launching new internal-combustion models like the redesigned 2024 Mustang muscle car and upcoming new Ranger pickup truck, and claiming the business plan accounts for the needs of smaller stores.
"We undertook an extensive listening tour of our dealers to understand their markets and customer needs as we developed new dealer standards," he said.