Ford Canada has again extended the deadline for dealers to enrol in its electric vehicle programs as the two sides try to resolve the concerns some retailers have spending up to $1.3 million to sell and service the automaker’s EVs beginning in 2024.
Ford’s 440 dealers have until Feb. 17 to enrol in the Model e Certified or the Model e Certified Elite programs, the automaker told Automotive News Canada.
Ford has not disclosed how many dealers have signed up so far. It had initially set a deadline of Dec. 16 but extended that to Dec. 30.
“The dealer consultation process on the Model e program began last spring and to continue these important discussions, the company has extended the enrolment deadline,” Ford said in a statement Jan. 13.
In a sign of ongoing dealer discontent, Toronto lawyer Shaun Laubman said he has been retained by a group of retailers, although he did not disclose the number.
Neither Laubman nor Ford would confirm whether dealers have launched legal action.
Some retailers in larger markets have enrolled in Model e programs, saying they consider the infrastructure upgrades are commensurate to having a Ford franchise. Others are working through the Ford Dealers RoundTable Association (FDRA) to resolve concerns, retailers told Automotive News Canada.
A dealer who spoke on the condition of anonymity said the FDRA received a response from Ford “just before Christmas, [but] it did not go far enough in considering the grievances or possible improvements for all.”
The dealer who has not signed on to the EV certification programs is not among those being represented by Laubman.
Ford estimates dealers will pay about $1.3 million to enrol in Model e Certified Elite program and about $560,000 for Model e Certified. About 90 per cent of the cost is charging infrastructure, including DC fast chargers, Ford said.
Certified Elite dealers will have first dibs on available EVs, while Model e Certified dealers will “focus on ownership and charging with limited built-to-order sales,” a Ford spokesman said. Dealers who don’t enroll in either program will be limited to selling internal combustion engine (ICE) and hybrid vehicles, as of Jan. 1, 2024. The next chance to join the Model e Certified program will be in 2027.
Ford said in a statement that the programs provide its dealership network with “a competitive advantage as we play to win in the BEV space.”
But the anonymous dealer said the infrastructure investment under the Ford programs would be a waste of money for his remote store because there are few if any other public chargers for “several hundred kilometres.”
The dealer also said rural customers who travel to a larger market to buy an ICE Ford or Lincoln can still get it serviced locally, but that won’t be possible if Model e Certified dealers are the only ones authorized to service EVs. The vehicle might need to be towed hundreds of kilometres to a certified dealer for service.
A spokesman for the FDRA declined to comment on the state of talks.
Dealers in three U.S. states have also pushed back, arguing the Model e Certified plan violates franchise laws.
Richard Sox, a Florida-based lawyer, told Automotive News Canada he is representing four dealerships in New York. Although Canadian franchise laws differ from those in U.S. jurisdictions, but Sox said the key contentious issues may be relevant to retailers on both sides of the border.
Sox said the U.S. dealerships opposing the Model e programs allege that:
1. The infrastructure investment that Ford is requiring of dealerships far exceeds what is “reasonably necessary” to sell and service EVs. In particular, the requirement to have an external charger available to the general public 24/7 is not only costly but also brings with it potential liability in the event of a malfunction or safety incident.
2. The sales model amounts to “an agency model through the back door.” Ford sets the price and even assigns a customer’s trade-in value. The dealer is then obliged to honour the assigned trade-in value regardless of the condition of the vehicle that is turned in.