At a critical moment during the Cuban Missile Crisis 60 years ago, President John F. Kennedy wanted to separate fact from fiction.
He famously turned to his advisers and said, “There’s a lot of noise out there!” Although registering much lower on the importance meter, the same can certainly be said of Ford Motor Co.’s Model e EV Certification Program.
In September, Ford rolled out the blueprint for the certification program at its national dealer meetings in Las Vegas. It is a wide-ranging guideline on what dealers need to do to sell and service Model e vehicles. It has two levels of certification that involve two different levels of investment. It’s important to understand how Ford got to this point.
On March 2, Ford announced that it would splitting the internal combustion business and the electric vehicle business into separate units. The ICE unit would be called Ford Blue, and the EV unit would be Model e. As a part of the announcement, Ford stated that dealers would be the distribution network for Model e, an endorsement of the franchise dealer model.
Ford CEO Jim Farley said that the company was “doubling down” on its dealers. He said while many questioned why Ford wasn’t going the direct sales route with EVs, the dealer network gave the company an absolute competitive advantage over the likes of the Teslas of the world.
After that announcement, senior leadership at Ford embarked on a national listening tour for over three months. They conducted over 40 meetings, meeting with more than 400 dealers face to face. The point of the listening tour was to get dealer input and feedback as the company worked to craft what the Model e business model would look like. Ford also engaged with the National Ford Dealer Council, as well as other Ford advisory boards.
It is our view, that although the blueprint that was announced in Las Vegas is far from perfect, it is a much better starting point than where many other automakers are going. Not only are new automakers such as Tesla, Lucid and Rivian embracing the direct sales mode, but some other legacy automakers are experimenting with nontraditional models.
Although we recognize there are concerns among some dealers and state associations, we believe that Ford is on the right path. The blueprint is not perfect, but many of the concerns and conspiracy theories are based on inaccurate information or a lack of understanding of the basic tenets of the program. One of the misunderstandings is that Ford will “set the price” to customers on Model e. That is simply not true and would be, in fact, illegal in all 50 states. Another miscommunication is the e-commerce piece of Model e’s come to market strategy. While it is true that parts of the sales process will go through an e-commerce tool, that tool is linked to the dealer. Every time. All the time. Every Model e sold will be sold through the dealer. The e-commerce tool has zero effect on that.
The blueprint is not the finish line but rather the starting point. Much work will need to be done between now and when the Model e Certification Program goes live in 13 months. The feasibility of a 24/7 Ford dealership charging network is problematic and will be discussed in earnest between the company and Ford’s National Dealer Council. The effectiveness of the e-commerce tool is a work in progress. That concept has been a hard one to get right for over a decade. It is our view that there will be many changes and modifications to the certification program between now and when it goes live. The devil is always in the details.
The most important piece of the Model e business plan is that it endorses the franchise system. Without that, nothing else would matter. The systems and processes are in place to work together, the dealers and Ford, to continue the hard work of making this a winning program for all. The National Dealer Council and Ford’s other dealer advisory boards are made up of the best Ford dealers in the country. Dealers need to continue to work together with the company to focus on the challenges that lie ahead as the electrification of our industry continues.
Make no mistake, we are at a focal point in our industry. With electrification coming, automakers are choosing sides: direct-sales model or franchise model. This is a fight for the future of the franchise model, and we believe that all dealers should recognize it as such and lend their support to automakers like Ford that are doubling down on their dealers. It’s time to cut through the noise.